Last week saw a deceleration of the long-standing price decrease trend in the southern European merchant bar market, with the downtrend even coming to a halt in some regions in the market in question. It may be said that the main reasons for the amelioration seen in the price situation are the recent increases seen in raw material and billet prices and also the supply tightness caused by production cutbacks. However, for the time being demand has not shown any significant increase in the market in question.
The Turkish merchant bar market started last week with a number of price increases. Although at the beginning of the week the price levels (varying according to the regions) had remained nearly the same at levels of TRY 740-790/mt ($462-493/mt), towards the end of the week the prices increased on a TRY basis against the background of the changes seen in the $/TRY exchange rate. However, no increase has been seen in demand in the domestic market. By the end of last week, offers from the Turkish merchant bar producers for small sized NPI-NPU profiles stood at TRY 960-990/mt ($596-616/mt), for angles their offers were in the range of TRY 940-990/mt ($585-616/mt), while their offers for flat and square bars stood at TRY 940-1,000/mt ($585-622mt) and stood at TRY 1,030-1,250/mt ($640-777/mt) for 80-100-120 mm IPE. The prices, which exclude VAT, are on ex-works basis.
On the export side, producers have raised their offers by around $100/mt based on increasing billet prices. The mills who had not been able to purchase billet due to the various figures pronounced for billet purchases have had difficulties in determining their prices, while the mills who did conclude billet deals have been able to give more definite prices for their offers. Also, export demand has been at better levels than domestic demand. Turkish mills' offers to the export markets last week stood at $580-600/mt FOB for angles, for NPI and NPU they stood at $590-610/mt FOB, for 80-100-120 mm IPE offers were in a range of $680-700/mt FOB, for 80-100-120 IPE A offers stood at $690-710/mt FOB, for 80-100-120 IPE AA offers were at levels of $710-730/mt FOB, while flat bar offers stood at $590-610/mt FOB. The prices in question are on actual weight basis and for November shipment.
Meanwhile, a Spanish mill increased its offers for small and medium sized merchant bars by €20/mt ($25/mt) in the middle of last week. However, it seems difficult to talk about a recovery in demand in this market. Last week, offers from mills to the Spanish domestic market on delivery to customer basis for 40-100 mm angles stood at €480-505/mt ($604-636/mt), for 10-25 mm square bars offers were at €460/mt ($636/mt), whereas offers for IPN and UPN were in the range of €580-600/mt ($730-756/mt) and at levels of €625-640/mt ($787-806/mt) for 80-180 mm IPE.
As for Italy, prices maintained the levels seen in the previous week, with offers from the mills for small and medium sized merchant bars standing at €520-540/mt ($655-680/mt) ex-works and 80-220 mm IPE standing at €650-700/mt ($819-881/mt) ex-works. On the export side, Italian mills' offers for small and medium sized merchant bars were at €430/mt ($541/mt) FOB.
Moving to the Portuguese market, last week the prices of small and medium sized merchant bars still remained at the levels of the previous week, i.e. at €520-530/mt ($655-667/mt) for delivery to customer. Also, rumors are circulating that prices are likely to increase in the Portuguese market.
In addition to all these developments, news came from China in midweek which is likely to impact on the merchant bar market in the coming months. If the current export tax imposed by China on 80 mm and above sized profiles is eliminated from December 1, then the international markets, in particular those competing with the Chinese mills, may experience a considerable negative impact.
The developments seen in the southern European market over the last week have created the impression that increases may be seen in prices in the coming days. However, market players are wondering whether such possible increases would be accepted by end-users.