Mediterranean anemia for rebars

We had already mentioned in our earlier reports that the September blossoming in the rebar market might not continue in October. As a matter of fact, both demand and prices have regressed in the southern European markets such as Spain and Italy so far in October. In the meantime, some slackening has also been observed in the export and domestic market prices of Turkish rebar. Looking at the markets in the Mediterranean, Black Sea and Middle East in October, Northern Europe and the CIS can be singled out as the sole markets retaining strength. Nevertheless, a slowdown in these markets may also be expected because of the approaching winter. In Turkey's domestic rebar market this week, 12 mm rebar price was in the range of minimum TRY 890/mt and maximum TRY 930/mt including VAT. While the Marmara region looks like the region with the highest price level, the Izmir region has set the lowest price limit. The market is quiet because of the approaching Eid-ul Fitr. In the export market which has been tremendously stagnant from mid-September onwards, nothing much changed this week, either. In the beginning of the week, while offers were heard at around $505-515/mt on actual weight basis to destinations other than the American and Gulf markets, now the rumors indicate a softening towards $500/mt FOB and below. In UAE, one of the most important markets for Turkish mills, domestic market prices seem horizontal as of the last week in September. The mills in the UAE are offering rebars to the domestic market at around AED 2,100/mt, while the trading firms in the domestic market are offering imported rebars at around AED 2,050/mt delivered to site for 3-4 months deferred payment. Nevertheless, the demand is heard to be pretty slack. Of course, Ramadan contributes greatly to this. After Eid-ul Fitr, the purchasers in the UAE are expected to re-enter the market for December deliveries. As the prices increased unexpectedly for importers in September, there may be some demand for December shipments accumulated from last month. Therefore, the bookings after the holiday may fill December shipments of Turkish mills. However, the purchasers do not seem as if they intend to accept $520/mt CFR UAE levels on a theoretical basis. The purchasing deal levels of the buyers are expected to remain below that level. The CIS and Northern Europe markets are also slowing down but they are still at levels which can be regarded as strong. Russia is still strong but the winter is approaching. Expecting a strong market for the coming months in these countries would be fantasy because of the harsh winter conditions there. However, the prices in the region are still high. Especially, offers from Mittal Steel Kriviy Rih to Eastern Europe for November shipments are heard at $520-525/mt FOB level. Meanwhile, DAF sales to Russia have been heard at around $500/mt. On the other hand, sales and offers to major markets such as North Africa for November shipments have been heard at 480$/mt FOB and below. The stagnation in the Southern European market still continues. Italy, Spain and Portugal are also indicating a further slowdown. Besides, the Euro/US Dollar exchange parity, which is at lower levels compared with September, is also affecting imports. On the other hand, the low parity also provides an advantage for the Italian mills in North Africa. As the slowdown continues in the CIS market, Ukrainian mills may become more competitive in the North Africa market in November. For the time being, ex-factory rebar prices in the Italian domestic market are around Euro 445/mt, while the ex-factory price of 12 mm AENOR rebar in Spain is around Euro 527/mt.