Rebar continues strong position in the old world

While the Turkish domestic rebar market maintained previous levels at the beginning of the week, it started to show an upward trend through the mid-week with the appreciation of US Dollar against the TRY and 12 mm of rebar started to climb again $500/mt ex-works. Although the scrap prices and export prices of rebar indicated an increase, domestic prices remained unchanged due to the uneasiness of trading companies and stockpilers. However, as we mentioned in our analysis last week, this situation could change this week. In fact, the appreciation of US Dollar against TRY increased prices. Turkish origin rebar sales concluded at $500/mt FOB and slightly over this level to Spain and Portugal. In Middle East, there are sales concluded at close to $500/mt FOB levels. Turkish producers started to force for $510-515/mt levels through the end of the week. Local Italian market also showed an upward trend this week. Rebar prices increased to around Euro 430/mt delivered to customers' premises deferred payment 60-days. Market was flat during April due to the long holidays. However, it seems that more working days in May and the strong position of scrap markets had positive effects. Italian producers, who did not almost allow Ukrainian producers to enter the Algerian market at the beginning of the year due to the tax advantage, started to share the market with the Ukrainians through the end of the first quarter. The high level of Euro/US Dollar exchange rate in the last few weeks created a difficulty for Italian producers in the Algerian market. It seems that the export offers, which are at around Euro 420/mt FOB Italian ports, given to Algeria are not much accepted. The rebar offers given to Portugal and Spain are still Euro 445-450/mt CFR Portuguese and Spanish ports. There is huge price gap between the offers of Turkish origin rebars and Italian origin rebars due to the Euro/US Dollar exchange rate. However, despite the huge price gap, Turkish producers, who almost sold their July shipments, and Italians early shipment advantage enable Italians stay in the market. Ukrainian origin rebars are being sold at $430/mt FOB in Algeria and at slightly below this level in Middle East. Customers, who did not show interest for purchases two weeks ago when the prices increased, started to show interest to current levels of Ukrainian origin rebar past two weeks since the prices picked up in Black Sea and Mediterranean. Middle East and Gulf accept these levels. Ukrainian origin wire rod is being offered at $440-450/mt FOB Ukrainian ports. It is heard that there are export sales concluded at $440/mt FOB to these regions. However, since the Southern Asia, which has not yet reacted to the worldwide increases, the counter bids for Ukrainian origin wire rods are at very low levels. UAE origin rebar started to trade at AED 2,050-2,100/mt on theoretical weight basis. Local market prices increased to AED 2,100/mt in mid-April, but there were not much sales concluded at these level. However, now large tonnage sales can be concluded at these levels because construction companies in local UAE market expected that prices would fall mid-April and end of April. However, prices are not expected to show a decrease in short-term due to the increase in scrap prices as of late April. If the construction companies can conclude big contracts at AED 2,100/mt levels, the importers in the UAE can return to the market with the higher prices.