Demand still tepid in Turkish merchant bar market

Since the Turkish construction industry has not yet recovered from the seasonal lull, the country's merchant bar market has remained sluggish in the past week. As can be seen from SteelOrbis Steel Reference Prices, following the downward trend observed in previous weeks, merchant bar prices in Turkey are now trending sideways. This week, domestic angle prices stand at TRY 1,110-1,150/mt ($686-710/mt) + VAT ex-works. However, SteelOrbis has heard that lower prices are also available in the market, due to strong competition.
 
The rapid spread of the political turmoil in the Middle East and North Africa, key export markets for the Turkish steel mills, has impacted Turkey's merchant bar exports. Enjoying the weakness of the Turkish lira against the US dollar, with the exchange rate hitting 1.6 this week, Turkish merchant bar exporters have pulled down their angle offers to $715-725/mt FOB. Despite this move, buyers in the foreign markets have continued to remain quiet for the time being. While Turkish mills concluded some low volume merchant bar exports to West Africa in the past week, exports have remained tepid in general. Turkish steel producers are still seeking alternative export markets in order to compensate for the absence of North African demand.
 
Market operators indicate that the scrap price increase of TRY 10/mt has not been reflected in merchant bar prices due to the very low or virtually inexistent demand even though we have now moved into the month of March. According to the general market expectation, due to the weak demand merchant bar prices in Turkey will trend sideways for a while. In line with the anticipated acceleration of construction projects in the next couple of weeks, demand is foreseen to increase and finished steel product prices are expected to improve.