Rebar activity focused on the Middle East, Europe plays catchup

This week, domestic rebar prices recorded increases in some regions of Turkey compared to the previous week's levels. However, the prices were flat in some regions. 8-12 mm rebar prices in the Turkish domestic market were this week at TRY 910-955/mt including VAT ($539-565/mt+18% VAT). Most of the traders' stocks are full at the moment. Although the winter season this year has been very mild, construction firms seem not to have entered the market yet. Due to payment difficulties and the slowness in the rebar market, some of the traders in the domestic market have sold a part of their stocks below the market price levels. On the other hand, most traders are trying to maintain their stocks as they consider that the prices will increase further due to the high billet prices and the good level of exports. On the export front, prices have recorded a sharp increase this week. One week ago, Turkish rebar exports were at $515-520/mt FOB to destinations other than the US and Gulf markets. However, the prices have increased further, with bookings concluded to the UAE at $540-545/mt CFR on theoretical weight basis through the end of last week. Turkish export offers are at $540/mt FOB and above to destinations other than the US and Gulf markets. Offers for the UAE are at $555-560/mt CFR on theoretical weight basis. The situation is calm this week in terms of bookings. Since southern Europe has not made price increases after the holiday period like the Turkish producers, they are not interested in offers from Turkey for the time being. Customers in the Gulf region are very surprised in the face of the sharp price increases. The domestic producers' prices in the Gulf region are relatively competitive compared to the Turkish prices. However, the reserves of the UAE stockists are very high. Furthermore, they need goods for the next few months, and so they are watching the price increases in Turkey with anxiety. With positive expectations in southern Europe after the holiday period, the producers there announced that they would increase their prices. Spanish producers have increased their base prices by Euro 20/mt at the beginning of this week to around Euro 330/mt. The price level of AENOR-certificated 12 mm rebar in the local Spanish market is at around Euro 510/mt delivered to warehouse, excluding VAT. Most of the domestic stockists have concluded their purchases at early January prices, as they were expecting the latest price increase. Therefore, it will be some time before trading takes place at the higher prices. On the other hand, the continuing price rise in import offers may cause domestic prices to increase further. Currently, the base price is at Euro 260-265/mt (Euro 425-430/mt ex-works) in Italy. The producers have failed to reach their target of Euro 280/mt since their return from the holidays. Neither the high rebar offers from Turkey nor the high billet offers from the CIS have been able to boost activity in the Italian market yet. However, the Italian market is also expected to rise soon. Italian exports showed a little activity. Italian producers seem to be growing active again in the Algerian market since Mittal Steel Kriviy Rih increased its prices. SteelOrbis has heard that rebar bookings have been concluded at Euro 425/mt FOB to the Algerian market, but in small tonnages. This week, Mittal Steel Kriviy Rih has set its prices as $470/mt FOB for Algeria. However, some traders indicated that they were able to make purchases slightly under this level. It is heard that the price level is at around $500-505/mt CFR. On the other hand, there are rumors that the Russian market is slowly becoming active and may be in the market for spring purchases. If there is good demand from Russia, Ukrainian producers may direct their products to Russia again, like in the third quarter of last year. This situation may cause Ukrainian origin rebar prices to increase in February.