After China imposed its 10 percent export tax on merchant bar products, offers from this country began to lose their attractiveness due to the hike in its merchant bar prices. In this context, demand for Chinese merchant bars has been declining in line with the increase in offering levels from $500-510/mt FOB to $600-605/mt FOB. The most significant reason behind demand in China's case was the price advantage offered; however, this advantage has been lost with the implementation of the export tax and demand has consequently seen a downturn. Sales of large amounts of Chinese bars, especially to African countries, has been witnessed this year. In the same way, we have seen that Chinese producer companies capable of performing production to US standards were also able to shift exports to the USA. Of course, with the increased Chinese merchant bar prices, the narrowing of the gap between the offers given by the Chinese mills and traders and those of the Turkish mills is likely to cause an increase in Turkish exports to the African markets - a destination where Turkish exports have not been in a healthy state recently. With demand from Europe weak in the current period, the Turkish mills can now be a valid alternative to China in Africa.
Turkish mills have been offering angles at $640-650/mt FOB for late August/early September shipments and flat bars at $650-660/mt FOB. It may be said that demand is higher from the Balkan countries in particular (except for Greece) in the current period; however, the tonnages are of course in lower amounts. As regards IPN and UPN, the Turkish mills have been mentioning shipments with much later dates e.g. late September/early October. The offers are in the range of $670-680/ mt FOB.
The domestic market in southern Europe has continued its stability as regards merchant bars. There has been no recovery in prices due to higher competitiveness, especially in small section merchant bars compared to the larger sizes, as well as due to low demand. As August is the holiday season, the domestic markets of southern Europe are likely to remain in their current state during that month.
There has been low demand for merchant bars, particularly for the IPE group, in southern Europe. Imported 120-200 mm IPEs in Spain are at $630/mt delivered to warehouse including 90-day deferred payment, whereas, in Italy, prices for 180-200 mm IPE remain unchanged at $630/ mt delivered to warehouse.
At the end of the holiday season, merchant bar prices may indicate an upward movement due to the increased demand in Europe. If we consider that China's prices will also remain high, it is possible to say that an increase may occur in the demand for Turkish origin merchant bars.