During the current week, the seventh week of 2009, end-user demand for rebar and merchant bar products in Europe and the CIS have been at low levels. After the decline in scrap prices and the latest ex-continental Europe HMS I/II 70:30 scrap deal concluded by a Turkish producer at the price level of $218/mt CFR Turkey, which is below the expected levels, market players now have concerns that billet prices may register a further decline.
In the local Turkish market, due to the reduced price gap between billets and rebars, no definite price level for billets has been seen this week either. As of February 12 a Turkish bar producer announced its billet prices at the level of $378/mt ex-works, excluding VAT, and the level in question has determined the bottom price level in this country. Turkish producers have this week offered billets for export at levels of $390-410/mt FOB Turkey. However, the billet offer price levels in both local and export markets of the Turkish producers, who have been in competition with the CIS billet producers, have this week experienced difficulties in remaining competitive with CIS offers, both in Turkey and overseas.
Meanwhile, CIS producers have this week offered billets at the price range of $375-390/mt FOB. It is heard that there have been some deals from Ukraine and Russia to Turkey and Iran. However, due to the tightening of end-user demand for rebars in the Middle East, there has been an excess of billet supplies to the Middle East; thus, it is heard that buyers in the Middle East have turned their attention to their own local markets instead of to CIS and Turkish origin billets.