Since buyers from the Gulf have resisted Turkish producers' demands and also due to Europe's weak post-holiday return, Turkish producers' offer levels this week were down to a price level of $565-570 FOB for late October shipments to destinations other than the UAE and the US markets - compared to rebar offer levels of $590/mt in late August and early September. However, the higher €/$ exchange rate of 1.41 opens the way for increased sales to Europe.
It would be difficult to describe demand as being very strong in the local UAE market, where the price level for rebar is around AED 2,300-2,350/mt ($626-640/mt) for 3- and 5-month deferred payment. It is known that the latest Turkish offers on a theoretical weight basis are at around $605/mt CFR. However, these offer levels have not been accepted by buyers who are instead pushing for prices at $600 CFR and below on a theoretical weight basis.
The Italian producers' drive to increase price levels in the post-holiday period has succeeded to a certain degree. However, since the European market has not been performing well, this also affects the Italian market. Although producers have tried to increase base prices to €270-275/mt ($379-386/mt), the highest base prices seen in the market up to now are in the range of €260-265/mt ($360-372/mt). The current rebar price level in the local Italian market is at around €465-475/mt ($652-667/mt) in northern Italy, with 60-day open account.
Sales concluded in early September from Italy to North Africa were at a level of €435-440/mt FOB ($611-618/mt). The Ukrainian producers' announcement of increased prices for early September also helped prices to rise to these levels. However, the situation has started to change. The upward trend of the €/$ exchange rate and the possibility of a price decrease on the part of Ukrainian producers next month may put Italian producers on the spot vis-a-vis their Ukrainian competitors. In addition, given the weak situation of the European market and the aims of Spain and other countries regarding North Africa, all these factors may create a disadvantage for the Italian producers.
The Spanish producers were not able to achieve their desired upward movements after the holiday. Moreover, domestic rebar prices have decreased compared to the pre-holiday levels. The current base prices are at around €260-265/mt ($365-388/mt). The price level of medium size rebar in the Spanish domestic market is at €480/mt ($674/mt) delivered to warehouse. Although the producers have been trying to increase their prices, the slowness in the European domestic market, in line with the upward trend of the €/$ exchange rate and the possibility of import inflows in the future, may prevent producers from reaching their desired price levels.
There were positive expectations in the overall rebar market in late August and early September. Moreover, although some price increases have been seen in Turkish, Ukrainian, Italian, Greek and Romanian origin long products, the Mediterranean and Middle East rebar markets have not met the expectations in question so far in September.