The rebar market saw a slight increase in activity at the beginning of this week, but slowed down again as the weekend approached. Overall in Turkey, producer prices for 8-12 mm rebar are at TRY 1,030/mt ($638/mt+VAT) ex-works. However, it is possible to find prices around TRY 1,010/mt ($625/mt+VAT). It is also possible to find prices from traders below TRY 1,000/mt ($619/mt+VAT).
On the export front, offers of the Turkish mills for Europe are at $640-650/mt FOB. This week, the slowdown experienced in Europe ahead of the Easter holiday also affected the exports of the Turkish mills.
The imported rebar price level being charged by local stockists to contractors in the UAE market is at AED 2,450/mt ($667/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment, excluding VAT. Prices in the domestic market have not yet increased, despite the stockists' efforts. The latest bookings from Turkey were at $645/mt CFR on theoretical weight basis last week. This week, offers at $655/mt CFR seem not to have gained much acceptance. The latest bookings from China are at $555-560/mt CFR, although offers are at a level of $580/mt CFR. Customers in this region are not interested in making purchases from the Turkish mills without first being sure that producers will keep their prices unchanged for June shipments.
Problems are still continuing in the Egyptian market due to the policy applied by the government there. In particular, the Egyptian market is experiencing a very serious shortage of billet supplies. In addition, it seems difficult for rolling mills in the country to import billets due to the current level of long product prices. Rebar export offers from Egypt are currently at $640-650/mt FOB, including tax, but are limited.
The rebar market is currently strong across Europe. Prices have increased by £25/mt ($50/mt) in the UK to £375/mt (approx. $742/mt) ex-works. The rebar market is seeing continued strength in the Iberian Peninsula as well. After the increase recorded in early March, there was not any further change in prices in Spain during the rest of the month. The price level of AENOR-certificated B500S 12 mm rebar in the local Spanish market is at €610-620/mt ($818-831/mt) delivered to warehouse, excluding VAT. Producers are expected to increase their prices after the Easter holiday. Although Portugal made a lot of imports from Turkey early in the current year, further bookings are still being reported. The latest booking is at €525/mt ($704/mt) CFR 90-day deferred payment.
The base prices of the Italian mills are in the range of €360-370/mt ($483-496/mt), but sales are mostly being concluded at €355/mt ($476/mt). The price level of rebar in the local Italian market is at €530-535/mt ($711-718/mt) delivered to warehouse in northern Italy. Producers are trying to increase their prices slightly. Demand was not strong this week due to the Easter holiday. The latest offers for Algeria are at €505/mt ($678/mt). Italian prices had generally been expected to increase in March when Mittal Steel Kriviy Rih would announce its price rise. However, Mittal Steel Kriviy Rih has not issued any prices for Algeria, although the producer increased its prices ($610-620/mt FOB) for eastern Europe and the Baltic. The strength of the markets in northern and eastern Europe, as well as in Russia, is causing the Ukrainian mills to focus on these markets. According to reports, the strong demand in these regions may lead the Ukrainian mills to reduce tonnages allocated for Algeria and the Middle East. If this situation comes true, Italian mills may conclude sales at current offer levels and consequently this situation may result in an increase in Italian prices. Furthermore, it has been heard that Bulgaria is making offers to Algeria at $650/mt FOB.
A mild stagnancy has been seen in the Turkish domestic market in the last few days. On the export front, there are reports that customers are slightly hesitant. The price correction in scrap may be the cause of this hesitancy in the market.
On the other hand, almost all European markets - especially northern Europe - and the CIS markets are maintaining their strong movement. According to reports, new increases are expected in Spain, Italy, Germany and Poland. Most market players think that to date there have not any major negative factors impacting on the market. However, as regards a possible knock-on effect from the scrap market, they prefer to wait and see whether there will be a correction in prices after the Easter holiday. These market players are also of the view that northern Europe and the CIS will maintain their current movement for a while and that the Turkish mills will close their June shipments if they are able to sell the desired tonnages to the US and Persian Gulf. Under these circumstances, they expect that customers worried about the price correction will calm down.
Of course, we have to take into consideration that the price correction in scrap may be reflected significantly in the long products market. Furthermore, the traditional slowdown in summer shipments, along with the price correction, will also strengthen the expectations of customers.