In this week's analysis firstly we will compare with January/February period of 2008 and 2009 in terms of Turkish merchant bar export figures. In this point as a first thing that takes our attention, in the first two months of the current year, decreases are observed in some markets which were active with regard to demand in the first two months of 2008, while an opposite situation is seen in some markets regardless the global crisis in the same period of time. Data from IMMIB demonstrate that total exports of merchant bar tonnage from Turkey during January/February period of 2009 amounted to about 230,000 mt, comparing to the same period of 2008 with 316,000 mt. In January/February period of 2008, the main export market of Turkey in terms of merchant bars was Romania, with about 76,000 mt. Other largest quantities of export merchant bar in the January/February period of 2008 delivered to: UK, at about 41,000 mt; UAE, at about 32,000 mt; Greece and Iraq, at about 12,000 mt each; and Saudi Arabia, at about 10,000 mt. (IMMIB 2009)
As for the first two months of 2009, the main export market of Turkish merchant bar was Iraq, with 43,000 mt. The largest quantities of export merchant bar in the first two months of 2009 delivered to: Syria, at about 21,000 mt; Morocco, at about 18,000 mt; Algeria, at about 16,000 mt; and Italy, at about 13,000 mt. Meanwhile, in the first two months of 2008 export tonnage delivered to Yemen amounted to only 187 mt, while in the first two months of the current year this figure increased to 3,000 mt approximately. (IMMIB 2009)
In recent months, with the effects of the global financial crisis, the export markets of Turkey where demand comes from have gradually changed. As we mention occasionally, northern Africa, Iraq and partially Middle East have recently become the main target markets of Turkey in terms of both rebar and merchant bar. The mainstream reasons for that are re-construction process observed in the countries in question as well as reasonable export offers given by Turkish mills. However, looking at the European countries where Turkey exported in the first two months of 2008, we see that those countries have closely felt the effects of the global crisis in 2009. In Romania and UK, which were the top two export markets in 2008, construction sector has come to a standstill and demand has trended at low levels.
Beside the European countries, export tonnages delivered to UAE also decreased from 32,000 mt to 6,000 mt in the months in question. Decreasing demand due to suspended or cancelled projects in the UAE is the main reason behind the fall back in exports to this country.
According to these data, it is expected that the table will continue like that in the short term in the future. In addition to this, prices have been continuing to soften. Due to the decreases seen in scrap and billet prices last week, Turkish merchant bar export prices have this week continued to soften and decreased to the levels of $450-480/mt FOB.
Meanwhile, no change is observed in the general outlook of Europe. Prices have been continuing to soften as well as demand has been maintaining its slack trend. Although mills have tried to keep their prices as high as possible, prices have continued to decrease due to competition and softenings seen in raw material and billet prices.