Higher domestic prices in target markets push up Turkish rebar export quotations

Following Turkish rebar exporters' somewhat lower offers to Far Eastern countries and their sales to the region concluded last week, Turkish rebar export prices softened further on the lower end during the same week to $420-475/mt FOB on actual weight basis. As a result, the overall range of Turkish steel mills' offers to their export markets in general widened once again. However, import scrap offer prices to Turkey increased last weekend and Turkish steelmakers accepted these price rises as they restarted their scrap purchases. Due to their higher production costs, this week Turkish rebar exporters have failed to meet Far Eastern buyers' price expectations. As a result, they have focused on other target markets for rebar sales. Turkish rebar export quotations are currently at $440-475/mt FOB on actual weight basis, indicating a $20/mt rise on the lower end compared to the price levels recorded last week.
 
US buyers have concluded new deals for Turkish rebar in the current week as their expectations of a further rise in US domestic rebar prices have strengthened. It is reported that several Turkish dealers have concluded rebar sales to the US at $465-477/mt CFR on theoretical weight basis, while US-based buyers are seeking for more advantageous import rebar offers ahead of the preliminary determination expected in February in the countervailing duty (CVD) and antidumping cases against rebar imports from Turkey, Taiwan and Japan.
 
In Egypt where Turkish steel producers have long been finding it difficult to meet buyers' price expectations, local steel producer EZZ Steel increased its domestic rebar prices as expected on December 21 to EGP 10,300/mt ($549/mt) ex-works, including 13 percent VAT. The steelmaker's domestic rebar prices had previously been announced at EGP 9,718/mt ex-works on December 16. After Egypt-based EZZ Steel's announcement of an upward revision of its rebar prices, Egypt-based steelmaker Beshay Steel has also raised its domestic rebar prices, increasing them by EGP 580/mt compared to its price levels on December 19 to EGP 10,280/mt ($548/mt) ex-works, including 13 percent VAT. Other Egyptian steel mills are expected to follow suit. Turkish producers had increased their rebar offers to Egypt to $440-450/mt FOB after their latest rebar sales to the country concluded two weeks ago at $430/mt FOB. Currently, Turkish steel mills are also expected to revise their rebar offers upwards for Egypt amid higher domestic rebar quotations in this destination and due to their higher production costs.
 
Last week, we had foreseen that the local United Arab Emirates (UAE) rebar market would move on an upward trend. This expectation has been realized with UAE-based steel producer Emirates Steel Industries (ESI) announcing its January output rebar quotations at AED 1,818/mt ($495/mt). Accordingly, ESI has increased its rebar prices by AED 86/mt ($23/mt) for January production, as compared to its previous prices for December output materials. As a result of higher domestic rebar quotations in the UAE together with the increases seen in Turkish steel mills' scrap purchase prices, market players believe that Turkish producers' rebar offers to the UAE at $430-445/mt CFR on theoretical weight basis heard in previous sales are now no longer valid. Although Turkish steelmakers have not yet determined a new price policy for the UAE market, their new rebar offers to the country are not expected to be lower than $450/mt CFR in the coming period.
 
$1 = AED 3.67
$1 = EGP 18.75