Turkish mills were this week offering rebar for export at around $560/mt FOB on actual weight basis for late October and early November shipments to destinations other than the US and Persian Gulf. Although it would be difficult to describe exports as being strong this week due to the sluggishness in the Mediterranean, there was some sales activity to alternative markets, such as Iran and South East Asia. Buyers have been trying to maintain pressure on Turkish producers, but the latter have been resisting citing the continuing high raw material costs.
The price level of 12 mm rebar in the Turkish domestic market was at TRY 810/mt ($667/mt), including 18 percent VAT, against a background of not very strong demand. Because of the holy month of Ramadan and the continuous softening of the $/TRY exchange rate, traders have been staying away from stocks in the TRY-dominated market. Thus, traders have been buying less material than they are selling, resulting in decreased stocks. Another important factor in the Turkish domestic rebar market is the production slowdown, including ad-hoc stops, at the rolling mills. Thus, the market may see a lack of supplies in the near future.
Some soft movements have been seen in the UAE domestic rebar market because of Ramadan. Contractors have been trying to put pressure on traders in the local market. The price level of imported rebar in the UAE market is at AED 2,300-2,350/mt ($626-640/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. The latest concluded deals from Turkey were at a price level of slightly below $590/mt CFR on a theoretical weight basis for October shipments. Most traders have completed their sales for October and are now trying to put pressure on the producers for November shipments.
Italian domestic rebar prices, which increased slightly in early September, have followed a downward trend over the past two weeks. The price level of rebar in the local Italian market was at around €445-450/mt ($631-638/mt) delivered to warehouse in northern Italy, on actual weight basis with 60-day open account, excluding VAT. The transaction base prices were at a level of €240-245/mt ($340-347/mt) at the beginning of the week. However, buyers may expect to find a price level of €240/mt ($326/mt) in the near future.
Turning to Spain, producers announced an increase of €15-30/mt ($21-42/mt) in the past week. Although a base price level of €250/mt ($350/mt) could be seen the week before, the base price level rose to €265-280/mt this week. The price level of B500S 12 mm rebar in the local Spanish market was in a range of €490-505/mt ($695-716/mt) delivered to warehouse for 30-day deferred payment, excluding VAT. Producers think that the stock levels of traders are considerably low and have been expecting that this may help to carry the increase. However, some traders think that the stock levels in the ports are high and also, in their view, current demand cannot handle the increased price movement. In addition, traders think that the high €/$ exchange rate may cause imports to be performed in greater volumes, which may put pressure on the price level in the near future.
No price movements have been seen in the northern European market, which is currently sluggish. Slowness has been seen in both Germany and the UK domestic markets in terms of prices. The price level of rebar in the local German market is at around €450/mt ($638/mt) delivered to warehouse on actual weight basis, excluding VAT. Although producers in northern Europe had tried to increase their price levels, this movement could not be done yet.
It would be difficult to say that the Mediterranean and the Middle East markets were doing well coming up to the end of September. Contrary to the surprisingly strong conditions in the Far East and South East Asia markets, the Mediterranean market is considerably weak. It will be seen in the near future that if the downward price trend in the European market will switch to a positive movement inspired by the price level of nearly €500/mt, excluding VAT in the Greek domestic market. Besides, thanks to the purchases from alternative markets, such as Southeast Asia and Iran, and the production slowdowns of the Mediterranean rolling mills, as a result of tightening margins, no negative effects have been seen yet.