The Turkish domestic rebar market rallied during the course of this week. Domestic rebar prices, which fell to around $40/mt below export prices due to excess stock and panic, showed an upward correction this week, rising to TRY 900-930/mt ($572-590 + 18 percent VAT), including VAT. The fact that Turkish mill Kardemir closed its billet and rebar sales, added to the fact that Turkish mill Isdemir concluded 70,000 tons of billet sales at $545/mt level and has completed its July shipment billet sales, has triggered the domestic market further. Most domestic producers consider that any additional price increases will depend on export sales.
The latest rebar prices from Turkish producers for export are at around $580-600/mt FOB for July shipments. The declines experienced in southern Europe are causing customers in this region to keep away from purchases. Customers in northern Europe, which is stronger than southern Europe, prefer to wait since the general trend is negative. Turkish domestic producers consider that the new Chinese export tariffs may have a favorable effect on the general rebar market, especially on the Middle East.
The price level of imported rebar in the UAE market is at around AED 2,400/mt ($654/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. Local traders are trying to sell as much rebar as possible since import offers are on a downward trend. However, domestic rebar prices seem to be catching up to these levels as the demand is strong and the costs of the latest cargoes are higher. According to reports, some offers being made from Turkey are at $605-610/mt CFR on theoretical weight basis. CARES-certificated rebar offers ex-China were at $580-585/mt CFR on theoretical weight basis prior to the announcement of the new export tariffs. The situation of Chinese rebar may go through the hoops in this region following the new export tariffs. This situation may lead customers who are out of the market due to the perceived negative trend to return to the market.
Although the Spanish producers have not reduced their list prices, customers are able to find prices at €25-30/mt ($34-40/mt) lower than the list prices. Currently, the base price level of rebar in the local Spanish market is at around €400/mt ($537/mt) ex-works, excluding VAT. However, it is possible to find prices up to €370-375/mt ($497-504/mt). Delivered to warehouse price of AENOR-certificated B500S 12 mm rebar is at around €590-600/mt ($793-806/mt). The two-week decline in Portugal and the sudden decline in Italy last week are affecting the Spanish market as well. According to reports, some Spanish producers are concluding exports to the relatively stronger UK market in order to help the domestic market. Furthermore, offers for northern Europe have also been heard, but it seems difficult to compete with the Italians in this market.
This week the Italian domestic market again recorded a slight decline. It is possible to find base prices up to €310/mt ($416/mt). The price level of rebar in the local Italian market is at €500-510/mt ($672-685/mt) delivered to warehouse in northern Italy. Export bookings have been concluded to North Africa at around $450/mt ($604/mt) FOB. Italian producers are currently able to make prompt shipments for exports. Ukrainian producers reduced their June production prices by $35-40/mt. The latest offers made to Algeria were at $580/mt CFR, excluding tax. Despite this decline, they do not seem able to compete with the Italians. Italian producers, which usually do not focus much on exports, appear to be trying to conclude low-priced overseas sales for excess stock in order to protect their domestic market. This situation seems to be affecting other European countries, such as Greece and Spain.
The new Chinese export tariffs, the announcement of which dropped like a bomb on the market this week, have not affected prices yet. It would be difficult to say that the market appears strong. There is an overall decline in southern Europe. Producers in northern Europe are not able to implement price increases due to the negative trend in the Mediterranean. Furthermore, despite the decline in Ukrainian prices, Ukrainian producers have not had success in the North African market (due to the Italian presence there), and so may switch to the northern and eastern European markets. This situation may affect these markets negatively. However, if the new Chinese export tariffs have a positive effect in the coming period, prices in the Middle East may rally slightly. A possible rally, especially in Turkish prices, may have a significant positive effect on the European market.