At various times throughout the month of August, European rebar producers will either cut down or completely halt their production and carry out overhauling works at their facilities. This situation will also slightly reduce rebar supplies in the domestic markets at a time when global markets are registering a downtrend. End-user demand in southern European countries such as Italy, Spain, Greece, Portugal and Bulgaria continues to be sluggish at the current time.
Rebar prices in the Italian domestic market, which are at €750-760/mt ex-works, are being offered for export to Greece and Algeria at lower levels than the price range in question. However, even these low price offers are not being accepted by Greece - a country where domestic end-user demand is pretty soft. As regards the Greek domestic market, producers' rebar prices currently stand at the level of €880/mt ex-works, whereas traders' prices are at €830-850/mt delivered to customer: however, none of these prices are accepted by local buyers. Moving to Algeria, supplies have increased and already exceed demand. As the volume of imports to Algeria from Italian and Spanish traders exceeded demand (these traders failed to sell according to expectations in their domestic markets and had to make offers below the levels of the mills), the prices in the Algerian market have become cheaper. As a result, offers from the southern European producers are considered to be on the high side for this country. The Italians' offers for rebar exports to the Algerian market are in a range of €740-760/mt CFR Algeria.
Just as in Italy, end-user demand in Spain is also very calm. While this week's rebar offers given to Portugal from Spain stand at €750-760/mt delivered to customer, the prices from the rolling mills in the Portuguese domestic market are more or less at the same levels. Due to the slowness in Portugal's end-user demand, the prices in question do not see too much interest.
The more positive situation as regards rebar demand in the Bulgarian domestic market, compared to other southern European countries, has not been able to ward off a drop in prices in this market. Prices in the Bulgarian domestic market have lessened by around €30-40/mt in the past four weeks and are currently standing at €820-830/mt ex-works.
When compared to price levels in the Middle Eastern market, the lower European rebar prices are not actually as low as they seem; however, the weakness of end-user demand in Europe is a remarkable.
During the 28th week of the year, local prices for rebar in the Turkish market were at TRY 1,950-1,990/mt ($1,684-1,719/mt) including VAT; however, by the start of the current week they had declined to TRY 1,500-1,520/mt ($1,295-1,313/mt) including VAT, causing Turkish market players to think that prices were starting to see a longer-lasting downtrend. Nevertheless, the price levels in question began to recover slightly towards mid-week and increased up to levels of TRY 1,600-1,620/mt ($1,381-1,398/mt) including VAT. The main reason for the drop in Turkish domestic rebar prices from TRY 1,990/mt ($1,718/mt) down to TRY 1,500/mt (both prices including VAT) within just three weeks, is the difficulty experienced by Turkish mills in gaining acceptance for exports offers in countries where they were actively concluding sales for eight months, as well as the resulting drop in their offer levels for certain countries. The Turkish mills, who were giving rebar export offers to destinations other than the US and Dubai at $1,380-1,400/mt FOB Turkey until three weeks ago, have this week reduced their prices down to $1,250-1,300/mt FOB Turkey. Turkish rebar export offers have keeping the country's domestic rebar prices at high levels since the beginning of 2008. Therefore, the lack of acceptance of Turkish export offers due to the recent fierce levels of competition and the resulting decline in levels has also affected the Turkish domestic market.
Turkish rebar export prices for Dubai have retained their previous levels, standing at $1,550/mt CFR Dubai. Against the background of these price levels, traders in Dubai continued to hold back and no large tonnage booking was heard. However, due to the high end-user demand in the local Dubai market, it is heard that there are new bookings on the agenda. It is known that the Chinese mills - China is exporting steadily to the Dubai market along with Turkey - are also concluding sales, though not with large tonnages. Compared with the prices of Turkish producers with CARES certification, Chinese export prices for rebar with this certification are on port-delivery basis and the prices are nearly at the level of the Turkish offers when customs and transportation costs are taken into consideration. Two weeks ago, rebar prices in the local Dubai market were at AED 5,800-5,900/mt ($1,579-1,606/mt), whereas they stand at AED 5,600-5,800/mt ($1,525-1,579/mt) this week.
Looking at the Saudi Arabian market, it is seen that domestic rebar prices have remained unchanged in the past three weeks. End-user demand in this market is strong, with prices of 8-12 mm thickness rebar at SAR 5,350-5,650/mt ($1,426-1,506/mt).
In general, when compared to other regions, the Middle Eastern rebar market is a source of optimism for both producers and traders due to the price levels, as well as the strength of end-user demand. We will see in the coming days whether end-user demand in Dubai - "the Pearl of the Gulf" - will remain stable or not, and we will see what levels are reached as regards the domestic market and import products.