From producers to traders, all players in the European rebar market will be on holiday for different periods during the month of August. During the month in question, the producers will reduce the supply level in their own local markets and so give these markets a chance to catch their breath. Producers and traders in Europe, who have been facing difficulties due to weak end-user demand, expect that the local market prices will increase with the beginning of September, aided by the decreased supply levels. Prices have been falling at a slow speed, contrary to expectations. This is because traders' stocks in Italy and Spain are at low levels, and because the market players are looking forward with optimism to a reawakening and increase of demand with the coming of September.
In contrast to the positive standby mood in Europe, the downtrend in the local Turkish rebar market has been influential in the pessimism observed among players in this market. Following the large quantities concluded by Turkish producers to the Middle East (mostly Dubai) and southern Europe since the beginning of 2008, export deals have been slow for a month now. For this reason, the price levels in the local Turkish rebar market have decreased by $400/mt in the last five weeks. As of this week, the rebar price levels in the local Turkish market vary at TRY 1,500-1,520/mt ex-works, including VAT ($1,088 - 1,102/mt ex-works, excluding VAT) from the producers, and are to be found at TRY 1,380-1,400/mt including VAT ($992-1,006/mt excluding VAT) from traders. The rapid decrease in question following the previous swift increase has affected both producers and traders, but with the former affected to a greater degree. The Turkish producers, who are expected to cut their prices due to the downtrends in raw material and billet prices, are aiming to melt their raw material and billet stocks, which were bought before the downtrends kicked in. They are also softening their export price levels at a slower rate compared to China and Ukraine. In this context, some international traders with previously taken positions are offering material with CARES certification to Dubai traders at $1,400-1,450/mt CFR, while offers from China to the UAE (also with CARES certification) are at $1,250-1,270/mt CFR Dubai. On the other hand, the Turkish producers, who have not been retreating from their offers at the level of $1,550/mt CFR Dubai, are again seeking opportunities to conclude deals.
The prices for rebar in the local Dubai market have this week maintained their flatness. The rebar price in the local UAE market varies in a range of AED 5,300-5,800/mt ($1,443-1,579/mt) delivered to site, on theoretical weight basis, with three to four month deferred payment. The local traders in this market have been experiencing difficulties in anticipating to what extent the construction sector will be affected by certain factors, though it is thought that activity in the sector may be slow due to the approaching month of Ramadan and the extreme hot weather. In this context, the traders do not expect any softening in prices. However, the rebar prices in this market, which have been flat for three weeks due to the low-priced offers from China, Ukraine and Spain, could register a softening under the additional impact of increasing supplies. In the event of such a softening, the Dubai traders who have concluded deals with various tonnages from Turkish producers at $1,470-1,550/mt CFR Dubai for August/September shipments may face certain difficulties. The Turkish producers do not want the Dubai traders to find themselves in such a difficult situation as historically they have provided a strong business connection with the Dubai market. Thus, despite the fact that the Turkish producers have not concluded any considerable deals for a month and more, and despite the low-priced offers to the region from China, Ukraine and Spain, the Turkish producers are not lowering their price offers from $1,550/mt CFR so as not to exacerbate the situation of the Dubai traders.