The Turkish domestic market finally experienced its expected rise last week - domestic prices increased as expected and export prices also picked up. The increase in
scrap prices, the strong
rebar exports and the appreciation of the US Dollar against the Turkish Lira have all contributed to this situation. This week, 8-12 mm
rebar prices are in a range of TRY 1,030-1,095/mt, including 18 percent VAT. This week, the domestic market is calmer than the previous week since the traders' stocks are higher due to the price increase expectations. Traders are reducing their stocks this week by taking advantage of the price increases. However, if the rise in export and
scrap prices continues, domestic prices may increase further.
On the export front, Turkish mills' offers for
Europe were at $620-630/mt FOB Turkish ports at the beginning of the week. Last week, the latest sales concluded to southern and northern
Europe were at $615-620/mt FOB. Offers from southern
Turkey to the Israeli market were at $610/mt FOB. However, most of the producers are aiming at a level of $630/mt FOB for
Europe due to the increase in
scrap prices in mid-week.
The imported
rebar price level being charged by local stockists to contractors in the
UAE market is at around AED 2,350-2,400/mt ($640-654/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. Offers from
Turkey increased from $610-620/mt CFR on a theoretical weight basis at the end of last week to $630/mt CFR on a theoretical weight basis this week.
Prices are also continuing to increase in
Europe. Base prices in
Italy rose slightly, now ranging at €360-370/mt. Producers' prices for delivery to customers' premises were at €530-535/mt in the north of the country.
Italian mills are offering
rebar to Algeria at €490-495/mt FOB for April and May shipments. The fact that Mittal Steel Kriviy Rih raised its offers to $550/mt FOB Black Sea (levels for other markets are close to $600/mt FOB, with levels for Eastern
Europe at above $600/mt FOB) for Algeria, may boost the opportunities for Italian mills in Algeria. Considering that the Russian domestic prices have started to increase, this situation may cause Ukrainian mills to raise their prices rapidly for May
production next month. This may create a huge advantage for Italian mills in April.
Spanish mills have raised their size extras by €50/mt as of March 1, 2007, just as they had announced. Base prices also rose slightly, now ranging at €370-380/mt. The price level of AENOR-certificated 12 mm
rebar in the local Spanish market is at around €600/mt delivered to warehouse, excluding VAT. However, mills are not able to conclude much sales as most stockists concluded higher tonnage purchases at €540-545/mt at the end of February. New purchases may begin in the coming weeks with the reduction in stock levels.
As we mentioned in our analyses on 2 – 8 February 2007
Rebar continues ascension in Mediterranean and
Middle East -
How much higher can rebar prices go in Mediterranean and
Middle East?, possible activity in the Russian domestic market would revive the
CIS market as well as the North European market, and the Ukrainians could raise their prices in March for April productions. A lack of supply is being experienced in North
Europe, especially in
Germany, and prices are increasing since the exporters in Eastern
Europe and Baltic Sea have directed their goods to
Russia. This situation has led North European customers to import Turkish
rebar for the first time in a long time. Mittal Steel Kriviy Rih has increased its April
production by a minimum $60/mt for the Algerian market. Higher increases were seen for other markets.
The prices are continuing to increase in
CIS,
Europe and
Middle East. The increase in
scrap prices has also contributed to this rise.
Trading firms in the
UAE seem worried as they have experienced a continuous three month-rise since December 2006. Most
trading firms in this region prefer to limit themselves to essential purchases as opposed to high tonnages. The increases in
Europe have started late compared to
Middle East. Therefore,
trading firms in
Europe are not much worried like these in Persian Gulf. The export tax imposed in
Egypt may help
rebar prices increase in Mediterranean in short-term. However, market players are currently curious about how much the prices decreases in Egyptian domestic market will affect international
scrap and
billet prices.