Turkish longs exporters have failed their attempts to stabilize their prices, taking into account the high competition in the foreign markets and a general lack of the demand. In addition, the domestic sales have also been limited due to the financial issues – increased VAT, currency fluctuations and general payment risks. As a result, the mills have provided $15/mt discounts for export rebar, while in the local market a few producers have also gone aggressive in order to generate sales, while some local traders are also offering competitive prices in order to generate cash to compensate their credit payments.
Currently, ex-Turkey rebar offers are available at $585-595/mt FOB for August shipments versus $600-610/mt FOB seen last week. A fresh rebar sale to Israel has been rumored, however has not been confirmed by the time of publication. "The workable rebar offer level to Israel might be around $590/mt FOB or even slightly below," a source told SteelOrbis.
In the local Turkish rebar market, the general rebar price range varies at $580-620/mt ex-works versus $623-633/mt ex-works range which was on the table last week. The general sentiment on the demand side is negative.
The recent VAT increase from 18 per cent to 20 per cent is the most important issue in the local rebar market. Few sources believe it will not make any difference for the rebar sales due to sluggish demand, while others assume that it will generate the higher costs for the local traders and put pressure on the local traders for their credit re-payments.
In the wire rod segment, ex-Turkey wire rod offers vary at $590-605/mt FOB for August shipments, $10-25/mt down over the week. The domestic wire rod price range varies at $600-650/mt ex-works depending on the mill and region versus $615-670/mt ex-works voiced in the past week. Moreover, Kardemir issued its 6-27 mm SAE 1008-1010 grade wire rod price at $600/mt ex-works yesterday. One Izmir-based mill stopped its production in late June in order to set up their new wire rod rolling mill set up, SteelOrbis has heard.
A few Marmara-based mills are considering to stop their production for maintenance starting from mid-July most probably till the end of the month. In addition, an Izmir-based mill has also rumored to reduce their production capacity. All in all, the reduced production capacity/stoppages are driven by the sluggish international demand as an outcome of summer holiday in the Europe, unfavorable weather conditions due to heat in the Middle Eastern markets. Moreover, the aggressive pricing policy of GCC countries, North Africa and Asia has been making sales from Turkey rather challenging.