Long product prices remain firm in Mediterranean, Black Sea and Middle East

Turkish rebar offers kept their $550-560/mt FOB levels for September shipments. Some producers, which allocate material for the UAE, conclude August shipment sales. Large cargo bookings heard recently in the UAE are at $560-565/mt CFR. The Yemen market, which was not active for a long time, becomes also brisk in the last few weeks and sales are heard to be concluded to this market. Of course, the booking tonnages could not be compared with the sales to the UAE or the US. Although the Romanian and Israeli domestic markets are strong, the mentioned countries find Turkish offers high for September shipments and prefer to wait. The sales to the Spain and Portugal indicated a slowdown in the last few weeks due to the approaching holiday and decreasing exchange rate. Furthermore, there was not much sales concluded to Italy for a long time on the back of low domestic prices. Italian producers even concluded sales to Portugal, Spain, Greece and Bulgaria, which are Turkey's export markets, thanks to prompt shipment and low price advantage. Particularly Italian producers' offers reduced to around Euro 410-415/mt FOB in June, but rose to around Euro 425/mt FOB mid-June. It is heard that export offers now increased with the upturn in Italian domestic market. Italian producers, which almost filled the July production, are not expected to have difficulty in filling the August due to the holiday period. Export offers of wire rod and rebar are firm in CIS due to the strong domestic market. Ukrainian mill Makeevka is offering mesh quality wire rods for export in a price range of $470/mt FOB Black Sea on actual weight basis; while the export offers of other Ukrainian mill Mittal Steel Krivoy Rog for the same material is at around $485-490/mt FOB Black Sea on actual weight basis. Offers of Russian producers are above these levels. Russian mills are offering mesh quality wire rods at $495-500/mt FOB Black Sea on actual weight basis. However, both Ukrainian and Russian producers have difficulty in making export to Middle East and Gulf regions at these levels. On the rebar front, Mittal Steel Krivoy Rog is still offering the material at around $460/mt FOB. However, the mill is asking for levels a bit lower than these levels for the Algerian market. The future of the prices is uncertain, but it is obvious that the prices are high and producers are happy with this situation. The prices may continue their current momentum, if the US market, which seems to follow a flat movement, although it's strong, continues its strong position, and if Europe returns to the market strongly after the holiday. However, market players are not optimistic for the fourth quarter. Furthermore, the result of the export tax rebate situation in China, which accounts 1/3 of the global steel production, will affect the long product markets significantly.