Last week, we observed a switch to a rising trend in prices in the Turkish domestic merchant bar market. Accelerations of scrap supply and scrap prices on the back of scrap purchases, following increases seen in both billet prices and purchases, have been strongly reflected in merchant bar prices. Domestic market prices which started the week at the level of TRY 760-830/mt ($467-510/mt) reached levels of TRY 820-860/mt ($503-528/mt) with the help of the changes in the $/TRY exchange rate at the end of the week. Small increases in demand have been heard in some regions as well as price increases. The great slowdown in the construction sector due to the global crisis is one of the main reasons behind the low merchant bar demand seen in the Turkish domestic market. Also, the price fluctuations observed recently have confused buyers' minds. The domestic market is gradually trying to regain its lost confidence, and it is hoped that demand will increase slowly in the confidence-rebuilding period. For the time being, buyers have been purchasing only to satisfy their needs.
On the export side, demand has continued to come from Africa especially. The conclusion of merchant bar bookings has been heard at the level of $520-540/mt FOB. It is expected that demand will continue to be seen from Africa, which is the most important target market for Turkish merchant bar producers at the moment. Meanwhile, it is also heard that offers have been given to Romania and Portugal as well as to Africa and that sales have been concluded to the regions in question. In Turkey, where import billet prices have been at the level $410/mt and domestic billet prices have been standing at $440-450/mt under the influence of the accelerations seen in the scrap and billet markets, it is observed that Turkish merchant bar producers intend to reflect this increasing trend in their finished steel products. The announcement made by US President-elect Obama of a stimulus package focusing on infrastructure projects is a positive development for those merchant bar producers who export to the US.
Looking at the European side, it is seen, in particular, that some Spanish mills lowered their export offers last week. It is heard that mid-week offers given by Spanish mills for angles, flat bars and square bars stood at the level of €450/mt ($598/mt) CFR Portugal. On the other hand, merchant bar prices have been at the level of €500/mt ($664/mt) for delivery to customer in the local Spanish market. Against the background of slow demand, Portuguese buyers have purchased only to satisfy their needs. As for the UK, an increase of £25/mt ($37/mt) was reported in the prices of English merchant bar producers last week. Also, demand has been on a slack trend in the UK market.
Last week marked the full return from the holidays in the European merchant bar market. However, the recovery that had been expected to get underway with the conclusion of the holidays has yet to make its appearance.