It would be difficult to describe the last two or three weeks as a period of strength in the Turkish domestic market. Although the mills generally did not change their listed prices, they did apply discounts. However, the strong movement of rebar exports and the reductions seen in the inventory of local stockists caused a rallying in prices in mid-week. At the end of the week, there are no trader prices below TRY 1,000/mt. Producer prices for 8-12 mm rebar are in a range of TRY 1,020-1,050/mt ex-works.
On the export front, the offers of the Turkish mills for Europe are at $640-650/mt FOB. The strong trend experienced across Europe has given the Turkish mills a chance of catching the best prices in this market. There was uncertainty among market players in the Middle East and Europe over whether the US would accept high prices. A small tonnage booking from the US was reported at $670/mt CFR Gulf on a theoretical weight basis. If the US begins to conclude large tonnage bookings at this level, the Turkish mills may be able to achieve sales at their desired price levels in Europe and the Middle East.
The imported rebar price level being charged by local stockists to contractors in the UAE market is at AED 2,450/mt delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. The domestic mills' price levels are at AED 2,385/mt for April shipment. The latest bookings from Turkey are at $645/mt CFR on theoretical weight basis. Turkish producers are trying to increase prices to $655/mt CFR (on theoretical weight basis). The latest bookings from China are at $550-560/mt CFR (on theoretical weight basis). However, new offers are at around $580/mt CFR. There is a huge gap between Turkish and Chinese prices. However, the lack of tonnage from China is helping Turkish mills to continue their sovereignty in this market for the time being.
After the Egyptian government decided to fix prices, the domestic steel market has ground to a halt. In particular, production at the scrap-dependent EAF and the billet-dependent rolling mills was reduced or else stopped altogether. It has been heard that domestic prices have increased slightly, but not strong enough. Despite the tax, it seems that it is profitable for steel mills to do sales for export instead of domestic sales.
Italian mills are offering rebar for export to Algeria at around €505/mt FOB on actual weight basis for May shipments. If as expected Mittal Steel Kriviy Rih raises its prices sharply for May production, then the Italian mills may conclude higher-priced sales in the Algerian market. This situation may also support the domestic market in April.
Turning to the Iberian Peninsula, the price level of AENOR-certificated 12 mm rebar in the local Spanish market is at €600-620/mt delivered to warehouse, excluding VAT. The rebar price in Portugal is at €530/mt. Portugal purchased huge tonnage imports early in the New Year, therefore the import front is not so active now. However, if the inventory of the Spanish stockists' which purchased in February sees a drop, then both the import and domestic markets can expect to experience an active period in April.
Rebar prices in the UK are expected to increase by £20-30/mt from the current £350/mt to £370-380/mt in April. The developments in this market may affect the Spanish market positively.
Northern Europe (especially Poland, Germany and Latvia) stands out as the strongest market in Europe. Russia's demand for imports is having a strong influence on these countries. In addition, their strong domestic demand levels mean that the overall elevated demand levels they are experiencing mark them out from other European countries. Production levels are not stong enough in Germany and Poland, and also they are unable to import from Eastern Europe due to the strength of supplies from this region to Russia. Therefore, Turkish sales are being sought in Northern Europe.
Expectations were positive in Northern and Eastern Europe in mid-March due to the strong CIS and Russian markets. However, the trading firms and most producers in Southern Europe and the Middle East did not have positive expectations for April and worried that there would a downward price correction. The slight decreases concluded in scrap prices in previous weeks have increased this feeling of anxiety. However, the affirmative signals from the US, though not very strong, the strength of the Northern European market and the expectations that Russia will maintain its strong movement in the coming period may drive away the negative vibes of the market players in Eastern Europe and the Middle East for a short while at least.