Last week, the general trend of softening prices and demand shortage continued to be observed in the European merchant bar market. In a market atmosphere - where prices are indicating a drop with every passing day and maintaining their unpredictability - buyers are still continuing to suspend their bookings.
The prices in the Turkish local merchant bar market maintained their previous levels in the 37th week. In fact, we see that that the local prices have been standing more or less at the same levels for the last couple of weeks. The main reason behind this is the $/TRY exchange rate. Although prices have slightly softened on a US dollar basis, this slight decline has not been felt to the same degree due to the $/TRY exchange rate. As regards demand, no recovery has been observed in the domestic market. Buyers have continued to postpone their purchases thinking that the price downtrend will continue. Last week, merchant bars in the local Turkish market maintained their previous price range of TRY 1,020-1,370/mt ($822-1,104/mt) ex-works, excluding VAT.
Looking at the export side of the Turkish merchant bar market, we see a continuation of a downtrend in the given export offers. The continuous downtrend in the local and the import billet offers stands out as the second significant reason behind the drop in offers for merchant bar, just like the case with the other finished products. Not only the local buyers, but also the overseas customers are reluctant to conclude any bookings at the current uncertain juncture. In general, we see that the Turkish export offers are gradually going down below the offers given by the Chinese mills, the Turkish mills' largest competitors in this segment. This situation results in the possibility that the buyers in the UAE - a very important market for Turkish mills and a country where buyers had preferred Chinese bars for a long time due to their low price levels - may reorient their focus towards Turkish merchant bars.
During the 38th week, Turkish rolling mills offered angles for export at $830-860/mt FOB on actual weight basis for late September/early October shipments. In addition, flat bars were offered at $840-870/mt FOB, 80-100-120 mm IPE was being offered at $980-1,000/mt FOB, IPN-UPN were being offered at $840-870/mt FOB and 80-100-120 mm IPE AA was being offered at $990-1,010/mt FOB - all on actual weight basis and also for late September/early October shipments. In addition to the given offers, it is also heard that the order books of a limited number of producers are full till mid-November and that they are giving offers accordingly.
Moving to Spain, due to the demand shortage and high inventory levels, the merchant bar producers are continuing to slash their prices in order to sell off their materials held in stock. During last week, offers in the Spanish domestic market were at €720-740/mt for angles up to 150 mm, stood at €770-790/mt for IPN-UPN of 80-180 mm and were at €820-840/mt for IPE, all on delivered-to-customer basis.
As regards medium and small size merchant bars, the numbers given by the local traders in the Portuguese market stood at €760-770/mt delivered to customer. Compared to the pre-holiday period, it is possible to say that a price decline of around €100/mt has been seen.
Switching to Romania, we see that the merchant bar offers in the domestic market, which have been maintaining their levels for a long time, started to soften during the previous week. The prices - which varied in a price range of €820-840/mt for a long time - have finally gone down to the level of €790-800/mt. However, it seems difficult for these levels to see acceptance from the buyers in the context of a declining market.
In the UK domestic market, the merchant bar prices have been on a downtrend for the last couple of weeks and they continued with their softening in the previous week as well. During the past week, merchant bars of 140 mm and below sizes were offered by stockists in a price range of £660-690/mt ($1,214-1,269/mt) delivered to customer. It is also heard that the demand shortage in this market continues.
As regards the UAE, with the effect of Ramadan, we observe a continuation of a downtrend in merchant bar prices. During last week, medium and small size merchant bars in the Dubai domestic market stood at the level of AED 3,700-4,200/mt ($1,007-1,143/mt).
In general, last week the European merchant bar market was governed by a prolongation of price decline and demand shortage, as well as the continuation of the wait-and-see attitude adopted by buyers.