Last week was a scene to further decreases in the Turkish domestic and export merchant bar markets. Added on top of the sliding CIS billet prices, weak state of demand also led the merchant bar mills to decrease their prices. The end-users continued to delay their purchases due to the constantly decreasing prices. In addition to all, the shortage of cash and the credit policy of banks have their negative impact on the market.
The prices have last week continued to slide in the Turkish domestic merchant bar market. The price gap among regions early last week narrowed to some extent by mid-week. Buyers remain cautious about purchasing even though bar mills keep on dropping their prices. Producers and traders experience difficulty when collecting payments. In the 48th week, offers from the Turkish merchant bar producers for NPI-NPU profiles stood at TRY 800-840/mt ($502-528/mt), for angles in the range of TRY 790-840/mt ($496-528/mt), and for flat and square bars at TRY 790-850/mt ($496-532/mt). The $/TRY exchange rate has led the prices to show slight changes. Meanwhile, it is heard that some mills gave offers below these levels as per their stock levels.
As for the export market, the situation was not different from the domestic market. Following the offers given for ex-CIS billet dropped back to the $350/mt, the offers given by the Turkish mills continued to soften. For the time being, the major target market of the Turkish merchant bar producers is still the North African market. The most important problem observed in the export side is the letter of credit issue. In addition, it is seen that some deals have been extinguished against the background of the steadily declining prices. Because of this reason, the difficulties in terms of market confidence have started to be observed. Turkish mills' offers to export markets last week stood at $520-530/mt FOB for angles, for NPI and NPU they stood at $540-550/mt FOB, for 80-100-120 mm IPE offers were in a range of $560-570/mt FOB, for 80-100-120 IPE A at $570-580/mt FOB, for 80-100-120 IPE AA at levels of $580-590/mt FOB, while flat bar offers stood at $530-540/mt FOB. The prices in question are on actual weight basis and for December shipment. Also, it is heard that there are offers below these levels depending on the stock levels.
Looking at the South European merchant bar market, rumors have continued to circulate that an increase might be seen in the prices of the small and medium sized merchant bars. It is heard that the Italian merchant bar mills, who use the increased scrap prices as base, are considering to increase their prices in coming days. Last week, the prices of small and medium sized merchant bars stood at €490-520/mt ($622-660/mt) and 80-220 mm IPE were in the range of €600-650/mt ($761-825/mt) in the Italian domestic merchant bar market. On the export side, Italian mills' offers for small and medium sized merchant bars were at €420-430/mt ($533-546/mt) FOB. In Spain and Portugal, the prices of the small and medium sized angle, flat bar and square bar remained unchanged, whereas it is heard that further decreases may be seen in the prices of IPN, UPN and IPE. However in the Greek market, the purchasing activity seen in the previous weeks has converted to a silence. The stockists, whose stocks at low levels previously have concluded their purchases.
For now, the most important problem observed in the sector is the gradually increasing financial constraint which is caused by the global crisis. Today, borrowing a loan from the banks is getting more difficult, and it appears that it is a major requirement that the market confidence needs to be repaired to overcome these problems.