Rebar prices decline in Turkish domestic market as dollar weakens

In the Turkish domestic rebar market, traders who have low inventory levels have not replenished their rebar inventories as expected in the last week of October. Besides, the US dollar/Turkish lira exchange rate has declined in just a couple of days from 1.85 to about 1.75. These two developments have helped to curb the volume of transactions in the market. Considering rebar prices may see further cuts if the US dollar continues to depreciate against the Turkish lira, most buyers now prefer to delay their rebar purchases and observe the market trends instead.
 
Early last week, traders' rebar prices in the Turkish domestic market were standing at TRY 1,212-1,229/mt ($675-684/mt) + VAT ex-warehouse. However, due to weak demand and the depreciation of the US dollar against the Turkish lira traders' local rebar prices had declined to TRY 1,186-1,195/mt ($660-665/mt) + VAT ex-warehouse toward the end of the week. Meanwhile, early this week rebar prices have been adjusted downwards again in line with the decreases observed in the $/TRY exchange rate. Accordingly, yesterday, October 31, rebar prices in Turkey's Marmara region were announced as TRY 1,135/mt ($632/mt) + VAT ex-works, decreasing by approximately TRY 94-111/mt ($52-62/mt) as compared to the last price update on October 18. After this move, traders' local rebar prices have settled at TRY 1,135-1,161/mt ($632-646/mt) + VAT ex-warehouse as the current week starts.
 
This morning, on November 1, Turkish steel producer Kardemir opened its domestic sales for 12-22 mm diameter rebar at the level of TRY 1,140/mt ($635/mt) ex-works, excluding VAT. According to the list issued on October 18, the producer has cut its rebar prices by TRY 93/mt ($52/mt). The producer closed its sales on the same day, after selling approximately 27,500 mt. It is thought that some traders have concluded rebar transactions ahead of the Feast of Sacrifice holiday, considering their low inventory levels and also because they think prices will no longer decrease after the holiday.
 
Although the general expectation in the market is for a price increase after the holiday, it is difficult to see clearly what is next, given the reflection of the downward price trends in international markets and low demand in the domestic market.