In our analysis of last week, we had forecast a slight downward adjustment in the Turkish domestic
rebar market for this week. Indeed,
rebar prices did bottom out at $486/mt + 18 percent VAT on Monday and Tuesday of this week. However, the market then started to move slightly on Wednesday since most traders were obliged to re-enter the market on account of their empty stocks. On Thursday, 8-12 mm
rebar prices increased to $497-521/mt + 18 percent VAT. The strong situation of exports and
scrap has encouraged the traders, even though some believed that it was senseless to enter the market due to the adverse weather conditions. However, Turkish mill Kardemir's announcement of the closure of its debar sales as of December 22 may jazz up the other regions. This situation may cause difficulties for those traders who were planning to make their purchases after the holiday period.
Rebar export offers were at $495-500/mt FOB and over for February loadings. However, some bookings were reported to have been concluded at $490/mt. The fact that the Euro/US Dollar exchange rate began the week with a fall suggested that the last week before Christmas could be stagnant. However, with the upward movement of the Euro/US Dollar exchange rate, bookings began to be concluded. Turkish
rebar offers were at Euro 405-410/mt CFR in Iberian Peninsula and
Ireland. The offer levels of Turkish producers for the Gulf region are at around $505-510/mt CFR on theoretical weight basis. The fact that the customers in the Gulf region believed that prices would not decrease was responsible for an increase in demand. The importers who have accepted the $500/mt CFR level will soon accept the prices demanded by the Turkish producers.
In the European market, there has been a rallying of prices in the Iberian Peninsula. Spanish producers announced price rises both last week and this week. In spite of the price increases, last week some traders stated that they managed to purchase goods at the previous levels. This week, some producers are refusing to conclude sales at previous prices and are holding out for the price increases they announced. After Christmas, Spanish customers may accept the producers' price increases due to import pressures. As expected, the Italian market has maintained its situation. Traditionally, the Italian market experiences a stagnant period ahead of Christmas and this year is no exception.
Europe and the US are now entering their Christmas-New Year holiday period. Signals regarding the market situation in
Europe will be received after the month of January. We can expect to see some movements in the
Middle East and Gulf regions next week. However, these regions will have their holiday period in the first week of January. Similarly, the
CIS will be out of the market next week and in the first week of January. This means that we can expect to receive indications of the new market trends only in the second week of January. The general expectation is that prices will increase in January in the Mediterranean, Black Sea and
Middle East. However, this year there have been unexpected price movements in unexpected periods in the
rebar market. Therefore, we may witness an unforeseen downward price adjustment in the
rebar market in January before the upward trend arrives.