Mediterranean merchant bar prices are currently maintaining their strength. It is expected in Italy that the prices of merchant bars in sizes below 140 mm and equal to 160 mm and above will increase considerably in the upcoming days. The upward movement in scrap may be given as the main reason behind these increases. The Italian producers, who have been experiencing difficulties in setting prices due to the continuous scrap price increases, are hesitating to issue price levels.
The increase trend is being seen not only in Italy, but in Turkey as well. The merchant bar prices on actual weight basis in the local Turkish market (where billet price levels of $950/mt and above are being mentioned), depending on size, thickness and region, are at the following levels: small IPN-UPN are priced at TRY 1,320-1,360/mt ($1,016-1,047/mt), 100-120 mm IPE are at TRY 1,340-1,375/mt ($1,032-1,059/mt), angles stand at TRY 1,320-1,365/mt ($1,016-1,051/mt), and flat bars and square bars are at TRY 1,330-1,375/mt ($1,024-1,059/mt) - all prices are ex-works, on actual weight basis and excluding VAT. The prices also may differ in the sales price levels of traders (with previously-taken positions) which are lower than the mills' levels. The rising prices in the local Turkish market, which is experiencing low demand from end-users nowadays, are giving many market players serious food for thought. The market players in question include: producers (who have been experiencing difficulties in selling material in the local market), traders (who have been hesitating to build up stocks) and end-users (who have been working on project basis and do not keep stocks). Overall merchant bar prices in Turkey have remained unchanged in recent weeks, only varying according to the ups and downs in the exchange rates of the Turkish lira and US dollar.
Turning to the Turkish merchant bar export market, prices have this week kept their strength; however, no significant increase has been observed compared to the price level of last week. When we look at the concluded deals, it can be said that the export market is more active rather than the local Turkish market. Turkish rolling mills are currently offering angles for export at $1,050-1,060/mt FOB on actual weight basis for June shipments. In addition, flat bars are being offered at $1,060-1,070/mt FOB, 80-100-120 mm IPE is being offered at $1,120-1,130/mt FOB, IPN-UPN are being offered at $1,050-1,075/mt FOB and 80-100-120 mm IPE AA is being offered at $1,130-1,140/mt - all on actual weight basis and also for June shipments.
With its 15 percent export duty, China was not active in the export market during the first three months of 2008, also on account of its strong local demand level. China, which has been seeing greater export activity since late March and early April, is now making offers to some regions below the price levels of the Turkish and European producers. It is heard that there are a lot of offers particularly to the Persian Gulf and neighboring regions, on a theoretical weight basis and by container. It is also heard that the merchant bar deals concluded from Turkey to this region are at $1,080/mt CFR Dubai. In comparison, it is known that some Chinese producers are offering merchant bars at the price level of $1,010/mt CFR Dubai.
With regard to the North African countries, it is observed that prices are on the increase. Given the fact that countries in this region such as Morocco, Tunisia and Algeria (which countries in particular import small and large size merchant bars) are importing material from France and Italy, the rising costs in Europe may push up import products in these countries.
Looking towards the coming period, it appears that overall merchant bar market price trends in the future will be shaped by the movements seen in scrap and billet prices.