Turkish rebar offers for export were this week at $560-570/mt FOB on actual weight basis to destinations other than the US and Persian Gulf markets. Despite the lack of activity seen in the main export markets, such as Europe and the UAE, however, the Turkish producers concluded some sales to alternative markets such as Iran (mainly), Lebanon and Kuwait. In addition, it seems that their first billet sales in a long time to the Far East and Southeast Asian markets have provided Turkish producers with some badly needed relief.
The price level of imported rebar in the UAE retail rebar market was this week at around AED 2,275-2,300/mt ($619-626/mt) on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. It would be difficult to say that the market has been doing well. The price idea of importers was at the level of 570-575$ CFR on a theoretical weight basis. However, the Turkish producers have been keeping their prices at a high level due to the increased scrap prices, elevated freight costs, and the sales concluded to some alternative markets.
The European rebar market is considerably sluggish at present. Current base prices in the Italian market were in the range of €200-210/mt ($287-301/mt) earlier this week. In the same period, the price level of rebar in the local Italian market was at around €405-415/mt ($582-596/mt) delivered to warehouse in northern Italy, on actual weight basis with 60-day open account, excluding VAT. However, the producers have been facing margin difficulties due to the high raw material costs. Production slowdowns at Italy's rolling mills and electric arc furnaces (EAFs) are being heard. The Italian producers are targeting a base price level of €225-230/mt ($323-330/mt) in order to ease their current difficulties.
The base prices in the Spanish domestic rebar market are still at €255-260/mt ($366-373/mt). The price level of B500S 12 mm rebar in the local Spanish market is at around €475-480/mt ($682-689/mt) delivered to warehouse for 30-day deferred payment, excluding VAT. The Spanish domestic rebar market is quite slow at the moment and traders are complaining about the lack of demand. Meanwhile, the producers are not willing to decrease their prices any further due to the raw material costs.
The price level of the Italian and Spanish producers' offers for export was at €400/mt ($574/mt) FOB earlier this week. Although the buyers were insisting on prices below the levels in question, the producers were trying to hold on to these levels, or even trying to increase them.
Rebar and billet sales to alternative markets have been protecting Turkish producers from aggressive movements. If the buyers in the Middle East believe there will be no further decrease in the Turkish producers' prices, then the Middle East market may gain momentum. Meanwhile, the margins of the European producers are under threat from the high raw material prices. In the absence of any import pressure, the European producers may try to push for an upward price correction in the near future.