Turkish mills, which are targeting increased rebar export prices following quite a large volume of sales to the international markets and also much stronger import scrap prices, are expected to avoid discounts at least until mid-July. One reason is the approaching holiday period, during which trade usually slows down and, moreover, local demand may pick up after the Feast of Sacrifice holiday ends, and so the mills are under no pressure. In addition, the most recent import scrap prices for premium grades have been reported at levels far above $400/mt CFR, which provides additional support for Turkish mills’ bullish sentiment in the rebar market.
Currently, Turkish mills are aiming to get at least $700-720/mt FOB for rebar to be shipped in August. The level seems to be somewhat difficult to achieve in deals for now, but mills are not under much pressure for now, having sold considerable lots earlier and also having cut production to around 60-70 percent of capacity.
In particular, according to sources, a 10,000 mt rebar deal was closed in early July to Germany at $675/mt FOB Marmara for August shipment, while another lot was reported as sold to northern Europe at $680/mt FOB. A sale to West Africa for 5,000 mt was closed at $670/mt FOB. Some sources report there was a deal to Yemen at $620/mt FOB, although others believe the actual true level should have been closer to $645/mt FOB. In addition, Jamaica has booked around 10,000-15,000 mt of rebar at around $670/mt FOB, sources say.
Prior to these sales, as SteelOrbis reported earlier, Turkish mills sold large volumes at lower prices, and these sales support their upward sentiment seen at present. A total of around 150,000 mt of rebar were traded in mid-June to Asia at $620-630/mt FOB and around 60,000-80,000 mt were traded at around the same time to the US at $630-635/mt FOB.
“Today I don’t see much need for Turkish mills to decrease rebar prices since aside from export sales they also sold quite well to the local market. But since local demand was rather due to the tax investigation than to actual end-user demand or traders’ restocking, the lively business domestically may not last long,” a source told SteelOrbis.