Since an improvement in demand has been added to the uptrend seen in recent weeks in raw material and billet prices in Turkey, Turkish merchant bar producers have continued to increase their prices. Consequently, price hikes have been observed over the last week in the Turkish domestic and export markets.
While the price levels in the Turkish domestic merchant bar market were at TRT 760-850/mt ($485-542/mt) ex-works excluding VAT early last week, they increased to TRY 840-890/mt ($536-567/mt) ex-works excluding VAT towards the end of the week. The uptrend in finished steel prices in Turkey has been triggered by the strength of billet prices, with local billet prices at $410/mt ex-works excluding VAT and import billet prices at $410/mt CFR Turkey on average last week. It is observed that demand for merchant bar is coming from stockists more than from end-users. The rising trend of prices is also causing stockists and traders to buy in material. Additionally, it is heard that domestic producers in Turkey do not have much material in hand. In general, the continued strength of billet prices increases the possibility of strong merchant bar prices.
Meanwhile, in the Turkish merchant bar export market last week, the Turkish producers' offers were at $530-550/mt FOB due to the positive performance of scrap and billet prices. These strong merchant bar price levels also received some degree of support from the increasing number of price inquiries coming from the export markets. However, a wide price gap was still observed between the producers' offers and buyers' firm bids. Also, deals continued to be concluded to the Middle East and North Africa. Ex-Turkey merchant bar offers are currently being given for mid or late August shipment.
Overall in Europe, no improvement in end-user demand has been observed in the last week and the European merchant bar producers have been experiencing difficulties in increasing prices to their targeted levels. Merchant bar deals in Europe are for low tonnages in general, while price variation may be seen depending on payment terms and customers.