Approaching the end of 2007, the Far East and Middle East merchant bar markets seem more active than is the case in Europe. Meanwhile, global billet prices are still stronger than longs prices, freight costs are still high, and sluggishness continues to reign over Europe.
The global merchant bar market appears to be divided into two at the moment, between calm and activity. The Turkish domestic merchant bar market belongs to the former category, behaving as if it were still under the influence of Ramadan. It would be difficult to describe demand as being fairly strong; however, it should be emphasized that some sales have been seen even though the quantities naturally vary on a daily basis. The domestic prices are behaving in the same way as in recent weeks, with sales being concluded at the same price levels. According to the general expectations, the year will come to an end without any change being observed.
Turning to look at Turkey's merchant bar exports, despite the fact that demand from Europe has decreased, Turkish producers have almost fulfilled their bookings until the end of the year thanks to the demand from the Middle East. Turkish producers increased their prices this week; they have started to offer equal angles at the price level of $645-650/mt FOB on actual weight basis for January shipments, and flat bars at the price level of $655-665/mt FOB on actual weight basis, also for January shipments. Meanwhile, UPN & IPN export prices are being offered at $15-20 above the prices for equal angles.
As mentioned in the previous analyses, due to the rising prices of ex-China merchant bars caused by the high Chinese export taxes and the strong domestic demand in China, the sales of Turkish producers have seen an increase, especially to Dubai and Jordan. Equal angle prices are in the range of $680-690/mt CFR Dubai. Despite the lack of activity in Dubai's domestic market, routine purchases have been made.
Looking towards Europe, the domestic markets there are still calm. The percentage of import goods is fairly low at the moment. Demand is being met by domestic sources. It seems that the overall European market will close the year in a slow mood as regards activity levels.
Producers in southern European, who had barely been able to meet the demand from their own domestic markets in the first two quarters of 2007, started to make more export offers in the fourth quarter of the year. SteelOrbis is informed that the price for equal angles is at €480/mt ($703/mt) in the Italian domestic merchant bar market, while it is in a range of €480-490/mt ($703-717/mt) in the Spanish domestic market.