In the Turkish rebar market, Turkish rebar producers' export offers for both local and export markets this week again maintained their upward trend. Due to the scrap deals concluded in the middle of the 44th week of 2008 (i.e. two weeks ago), the prices of semi-finished and finished products started to increase at that time. This upward movement gained acceptance among local traders and end-users, with the result that local prices climbed up to higher levels. Thus, the local Turkish rebar market experienced rapid price increases and rebar purchases in the 45th week (last week) and the market also registered a rapid start to the current week.
Meanwhile, local traders in Turkey started the current week in a fairly imperturbable manner. Although the traders considered that the rapidly increasing prices could return to their old levels, they have proceeded very carefully with their purchases and have avoided raising their stock levels. In the local Turkish rebar market, prices have this week increased by TRY 200/mt compared to last week. Besides the local market offers, the Turkish rebar producers have also increased their export offers, raising them to levels of $600-610/mt FOB Turkey. Due to the news of upward price movements coming from several countries in Europe and the Middle East, it is thought in the local Turkish market that the new positive price trend has an increased chance of being sustained. Despite all these positive developments, however, Wednesday, November 12, was recorded as a fairly calm day in the local Turkish rebar market. On the day in question, end-user demand level was at fairly low levels. On Wednesday, while price levels had reached as high as TRY 1,100/mt ex-works including VAT ($572/mt excluding VAT), it was also possible to see other price levels as low as TRY 1,050/mt ex-works including VAT ($544/mt excluding VAT). As of Thursday this week, it was observed that the local traders began to work to build up their stocks. Considering that price levels could increase in the upcoming days due to changes in the US dollar-Turkish lira exchange rate and especially on account of the price increases in the Middle East, the traders moved to increase their stock levels.
Turkish rebar prices in the local market had increased to the level of around TRY 2,000/mt including VAT by the end of the first half of 2008 - mainly on the back of the Turkish producers' export deals, particularly to the Middle East. Consequently, the future export deals of the Turkish rebar producers will be very important for the continuation of the price increases which have been observed in the local market over the past three weeks. Due to the global financial crisis, confidence in the local Turkish market in the second half of the year has been fairly low compared to the first half. However, rising activity in the Middle East may help boost the market's confidence. As of Wednesday, November 12, rebar price levels in the local Dubai market had increased by AED 150-200/mt ($40-54/mt) after Turkish producers increased their offer price levels to this region. Up to then, end-users were purchasing just small amounts on a daily basis due to the continuously decreasing prices; however, they have since increased their purchase volumes, thereby causing price levels in this market to climb up. Besides the UAE, increases in local price levels have this week also been observed in Iran, Syria and Qatar. Despite the small amounts of the price increases, these price uptrends in the Middle East have given rise to optimistic expectations regarding the future in the local Turkish rebar market, which exports more than half of its rebar production. In which direction will the Turkish domestic rebar market now head? We will be better positioned to answer this question after observing the movements in demand and prices in the abovementioned regions in the upcoming days.