Middle East rebar market sees price rise but transactions on hold

Thursday, 05 May 2011 17:25:03 (GMT+3)   |  
       

Rebar prices in the Middle East are rising in parallel to the latest increases of Turkish producers' offers; however, buyers are currently hesitating to buy at the new levels and they prefer to delay purchases for the time being.
 
In the UAE domestic rebar market, the demand levels are moderate, while inventory levels at the stockists have decreased to some extent. This week in the domestic UAE market, price levels have been in the range of AED 2,550-2,575/mt ($694-701$7mt) on theoretical basis ex-warehouse. Offers by Turkish producers to the Dubai market are currently at $700-710/mt CFR on theoretical basis while traders in Dubai find the new price levels high and prefer to avoid any new bookings until the uncertainty in their domestic market susbides. For the moment, the purchasing activity by local traders is only in small tonnages, and for their prompt requirements they prefer to buy supply from domestic producers Emirates Steel Industries (ESI) and Qatar Steel.
 
 
In Saudi Arabia, rebar inventories prevail at high levels while demand continues to be moderate. The domestic price levels of rebar have not changed since our last analysis. Currently local traders are cautious towards the increased offers from Turkish producers. It is yet to be seen whether the new offer levels from Turkey will be accepted in this market.
 
The Jordanian rebar market has seen an uplift in scrap prices in recent days; however, this increase has not been reflected in rebar prices yet. Nevertheless, the possible closing of the Syrian border is still in question, and importers in Jordan are still busy building stocks, taking into consideration that they might have to use sea transport from Turkey, instead of transport overland, if the border closes. Market players expect construction projects and demand to become more active in the coming days.
 
 
In Yemen, the political problems still continue and have caused weaker domestic demand and import volumes in the last month. The rebar demand in the country is limited to end-users and spot bookings by small-scale construction projects. In parallel to the increasing price levels, the local traders have increased their price levels for theoretical weight imported medium sized rebar to $800-810/mt ex-warehouse for June deliveries and cash payments. Furthermore, Turkish producers are offering June shipment rebars to Yemen at $720-725/mt CFR on theoretical weight basis, with an increase of $30/mt over last week.
 
In Kuwait, demand for rebars is not strong and construction projects are still on hold. The market players in Kuwait indicate that latest offers from Turkey are around $710/mt CFR levels on theoretical basis, while buyers currently prefer to wait.
 
In Israel, the rebar market has become active upon the return from the holidays. Israeli producers are offering rebars in the domestic market at $765-775/mt ex-works level on actual weight basis, for cash payments, excluding 15.5 percent VAT. Some stockists are offering more competitive numbers for material they purchased previously, while Turkish producers' offers currently stand at $750-770/mt CFR levels on actual weight basis. The current uncertain level of prices causes some buyers to prefer to wait for the market levels to settle, and we see some traders that prefer to buy some tonnages in case prices rise further in the coming days.
 
In Iraq, the Turkish rebar offers given from the Iskenderun region in the south of Turkey have increased to reach $695-700$/mt ex-works, but buyers in Iraq are cautious towards the new levels for now.

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