Longs steel trade in the Mediterranean region has been in a lull over the past couple of weeks since the buyers have been less active during the Ramadan period and the Easter holidays. In such a situation, North African producers have been forced to cut their prices over two weeks, taking into account also tighter competition with Asian sellers and the downturn in import scrap prices in Turkey.
This week, according to sources, ex-Egypt rebar prices have been set at $650-660/mt FOB for June production, $20/mt down over two weeks. Some suppliers, however, are still insisting on $670/mt FOB for late May and early June production. In the wire rod segment, Egypt’s export prices decreased from around $680-690/mt FOB to $670-675/mt FOB.
In Algeria, one of the two large local producers is currently offering rebar at $680/mt and wire rod at $690/mt, for June production, both on FOB basis. According to sources, the mill has made at least a $10/mt reduction over the past couple of weeks. Another Algerian producer is currently out of the market since it is experiencing operational problems due to an accident at its DRI module.
In the meantime, Libya is in the market with around $620/mt FOB, while no ex-Tunisia offers have been heard in the market.
Along with the low demand and decreasing raw material prices, the tighter competition with Asian suppliers has pulled down offers, particularly from Algeria and Egypt. According to sources, the current offer levels for wire rod from Asian suppliers, namely Indonesia, are at $660-665/mt CFR depending on the volume and the discharging port. In addition, a large cargo has been reportedly sold to Europe at $650/mt CFR and this level is generally considered workable at the moment, although some traders are pushing for a further discount. In such a situation, taking into account the current freight rates to southern European ports, Algerian and Egyptian estimated wire rod prices are at least $50-60/mt higher than ex-Asia offers. "North Africa has a shorter sailing time, but $50/mt is still too much of a difference to be seriously considered. There should be more discounts,” a trader told SteelOrbis.