Although end-user demand has not been at desired levels in Turkey and the Middle East, Turkish domestic and export rebar prices (which had been on a downtrend for some weeks) have recovered in the last days of the current week thanks to the strength of scrap prices, and have risen to $450/mt FOB Turkey from the previous level of $400/mt FOB Turkey.
The main reason behind the rebar price uptrend, besides the demand from Egypt and Iraq, were the purchases by the UAE of Turkish rebar for ongoing projects in that country. Turkish producers, who have frequently concluded deals to Egypt and Iraq but at small tonnages, have now started to conclude some deals to the UAE for large tonnages. Since the Turkish rebar producers (who had previously reduced their capacities due to the tightening rebar export market) have increased their scrap purchase amounts on the back of the increased demand from the Middle East, scrap prices, which were already strong, have moved up further. In this context, difficulties have occasionally been experienced as regards finished steel product availability in both Turkey's domestic and export markets due to the low rebar supply levels. With this development, which has caused the market to be stretched, some sudden increases have this week been observed in both Turkish domestic and export price levels for rebar.
Meanwhile, FOB-based ex-CIS billet offers have also increased due to the recent uptrend in Turkish scrap, billet and rebar prices. While CIS billet offers were at $290/mt FOB early last week, they have increased to the range of $330-335/mt FOB toward the end of this week. The recent uptrends in both CIS and Turkish billet prices have also been reflected to the prices of finished steel products.
As the biggest long products supplier country in the region, Turkish rebar suppliers have been pleased with the large tonnage purchase activity from the UAE. However, UAE importers have mentioned that the recent purchase activity has mostly been due to decreasing stocks and in order to ensure rebar supplies for ongoing projects, and has not been due to new investments.
On the other hand, the local Turkish market has been relatively slow in its reaction to the increasing export prices. Some activity has been observed due to the upcoming local elections in Turkey. However, this has not been at sufficient levels to please local traders. Having failed to understand the Turkish producers' rebar price increase and also having failed to increase their stock levels when the new prices were reflected in the local market, local traders in Turkey then belatedly decided to buy in order not to be left behind in the market. Local traders have also hesitated to take risks and have preferred to buy only what they can be sure of selling. Local traders have been complaining that end-user demand is currently too low even though prices have moved up in the local market, and they also say that material is being exchanged mostly among the traders themselves.
Rebar prices in the local UAE market have this week remained unchanged compared to last week. Although Turkish producers' offers to the country in question have been at $430-435/mt CFR UAE, actual deals have been at levels of $400-420/mt CFR UAE. Thus, no price increase has been observed in this local market.