The Turkish domestic rebar market has been shaken by the fall experienced in Turkey's Marmara region. A producer in that region dropped its price to TRY 970/mt (around $600/mt + 18 percent VAT), including VAT, and succeeding in making huge sales. Although the producer has since raised its price to TRY 990/mt (around $610/mt + 18 percent VAT), including VAT, the market is still reeling. According to reports, before this shock, overall trader rebar prices in Turkey were at TRY 950/mt ($805 + 18 percent VAT) delivered to warehouse, including VAT. Afterwards, some producers in Turkey's Izmir and Marmara regions declined to announce prices. Some others issued prices at $630/mt. The decline in scrap prices has also impacted negatively on the Turkish domestic rebar market.
Turkish exports have not seen much activity this week. Offers for Europe were at $640/mt FOB and above. Last week, sales for alternative countries, such as Russia, were at around $620-625/mt FOB. Although prices have increased in southern Europe this week, customers prefer to wait and see instead of purchasing, since they want to be sure about what's going on in Turkey.
Rebar prices almost stayed the same in the UAE market this week. The imported rebar price level being charged by local stockists to contractors in the UAE market is at AED 2,440-2,450/mt ($665-667/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. The latest bookings from Turkey were at $650/mt CFR and above on theoretical weight basis last week. However, there is no demand for these offers. There is some uncertainty in this market due to China's cancellation of its VAT rebate. Turkish producers prefer to wait and see. Although customers have noticed the decrease in scrap prices, they are hesitant about making purchases since they are not able to forecast the effect of the Chinese VAT rebate cancellation on the Turkish producers.
Italian producers have increased their size extras by €25/mt ($34/mt) in April. Base prices in Italy are still in the range of €360-370/mt ($487-501/mt). The price level of rebar in the local Italian market is at €555-560/mt ($751-758/mt) delivered to warehouse in northern Italy on actual weight basis with 60-day open account, excluding VAT. Italian producers are pushing for €505-510/mt FOB ($683-690/mt) levels for Algerian exports. Ukrainian mills are offering rebar to Algeria at $575-580/mt. However, tonnages allocated from this source to North Africa and the Middle East have fallen since offers at $610-615/mt have been got for Eastern Europe and Russia. It would be difficult to say that demand for the Italian offers is strong. However, the fact that Ukrainian mills have reduced tonnages allocated to Algeria may increase the demand for Italian products towards late April. On the other hand, with the cancellation of the Chinese VAT rebate, Turkish and Ukrainians sales could see an increase to some Middle East countries, such as Syria and Bahrain, which have been targets of Chinese exports. This situation may provide additional support for the CIS markets, which are already strong.
Rebar prices have increased €30/mt ($41/mt) in the local Portuguese market. The price level of 12 mm rebar in this market is at around €560/mt ($758/mt) delivered to warehouse on actual weight basis, excluding VAT. This domestic market is strong. However, higher tonnage bookings that were previously concluded for imports are causing some customers not to import. Spanish producers have announced that they will increase their prices by €30/mt as of April 16. The Spanish domestic market has been very active this week due to this announcement.
The markets are still strong overall in Europe and the CIS. In Turkey, domestic market prices have recorded a sharp decline due to the softening in scrap prices and the higher long product stocks. There has not been any decrease in Turkish exports in the literal sense. However, despite the strong domestic market in Europe, most customers are hesitating to make purchases after the decrease in scrap prices. Turkish producers are not interested in making offers before they make sure of the effect of the Chinese VAT cancellation, especially in the Gulf market. There is hesitancy among market players in the Middle East and Mediterranean. Market players in these regions are worried that the possibility of price decreases on the part of the Turkish producers, in parallel to the scrap price decline, will corrupt the current good market atmosphere.