Rebar prices in the local Turkish market have this week increased compared to last week, rising from price levels of TR 770/mt including VAT ($424/mt excluding VAT) ex-works to levels of TR 840-860/mt including VAT. Three main factors are observed to be behind this price increase;
- Increasing scrap prices
- Increasing rebar purchase volumes of Egypt, Algeria, Libya and Tunisia
- Decreasing rebar supply due to the reduced production of rebar manufacturers in the region
Turkish producers' rebar export offers have also increased this week. Turkish rebar producers' export offers have this week been in the range of $470-490/mt FOB Turkey, and some deals have been observed at this price range. Meanwhile, the Turkish producers' rebar offers to Dubai have this week been at the range of $460-480/mt CFR, and it is heard that there have been some deals concluded at the price range of $460-470/mt CFR Dubai. On the other hand, it is observed that towards the end of the week the Turkish producers have not lowered their price below $470/mt CFR Dubai; however, they have been negotiating for large tonnages. It seems that most purchases in the Middle East have been performed by end-users.
Rebar price levels in the local Dubai market have been stable for eight weeks in succession. The rebar price levels in the UAE have been at AED 1,800/mt ($490/mt) delivered to site on theoretical weight basis for cash payments, whereas the prices have increased to the level of AED1,900/mt ($517/mt) delivered to site, also on theoretical weight basis, for deferred payments.
Rebar prices in Syria and Saudi Arabia have this week seen continued stability.It is heard that rebar prices in the local Syrian market have been at SYP 26,000/mt ex-works, excluding VAT, while 16 mm and above diameter rebar prices in Saudi Arabia have this week been at the level of SAR 1,870/mt ($498/mt) ex-works including five percent VAT on theoretical weight basis.
Although the rebar demand level in the local Yemeni market has not been so sluggish, Turkish origin and local production rebar prices have this week dropped by $10/mt compared to last week. While local production rebar prices in this country have this week been at $490/mt, the price level of Turkish origin rebar has been at $530/mt.
In these the first days of 2009, Turkish producers have been very gradually (in order to allow the markets to digest the hikes) increasing their prices both in the local and export markets. These price increases by the Turkish producers, also necessitated by rising scrap costs, have been accepted by both the local and international markets. Considering the costs of scrap, billet and rebar, market players seem to think that the Turkish producers' price levels are reasonable in general. Thus, rebar prices are not expected to go down sharply (unlike the sharp downtrends seen in the near past) in the near future provided that scrap prices maintain their strength and that the market supply does not increase.