Turkish rebar producers have since last week started to reflect the increases in raw material prices (triggered by recent purchase activity) in their finished steel product prices. The rebar price uptrend which started in the local Turkish market last Friday has continued this week. While local traders bought certain tonnages after Kardemir's announcement last Friday of rebar prices at TRY 813.2/mt including VAT ($464/mt + VAT), local traders have this week hesitated and not bought much at the price level of 840.16/mt ($482/mt + VAT) ex-works, including 18 percent VAT, which the steelmaker announced early this week. A lot of traders in the local Turkish market are hesitating to buy finished steel products since they feel that the current rising trend should be supported on the end-user side.
While Turkish producers' rebar offers to the export markets have been at $470-480/mt FOB, it is observed that buyers are having trouble in accepting the rising price levels. It is also observed that offers have been given mostly to Africa, South America and the Middle East (including Iraq).
While price levels have this week been stable at AED 1,810-1,830/mt ($493-498/mt) in the UAE market, few Turkish offers, at $490-495/mt CFR, have been heard in this country this week. With Qatar Steel having increased its local prices by $10/mt, it is expected that Emirates Steel will likely increase its local prices also. However, in the UAE market where demand still lacks strength, it is known that importers are not warm towards current Turkish offers.
Egyptian producer Beshay Steel has this week increased its prices in the local market to EGP 2,800/mt ($513/mt). In line with this, it is expected that its fellow local producer EZDK will increase its prices for December delivery. As no great activity is observed in the Middle East due to the upcoming pilgrimage season to Mecca and the Feast of Sacrifice, it is expected that after the holiday demand will gain strength in Saudi Arabia with the new projects that are due to start.
Meanwhile, no great activity as regards purchases is expected in Turkey due to the upcoming religious holidays. On the other hand, it is thought that foreign buyers will wait until next week and the following week to make their purchase decisions depending on the Turkish exporters' offers.
Similar to the uptrend in Turkey, increasing rebar prices have also started to be seen in Europe in the last two weeks. The increases in the prices of raw materials and semis are the main factor behind this increase. Producers in southern Europe in particular are trying to reflect the higher raw material and semis prices in their rebar prices for both the local and export markets. In general, a range of €330-340/mt FOB has started to be mentioned; however, it is not correct to say that €320/mt FOB is no longer available this week. On the other hand, ex-Europe rebar offers for the export markets are showing variation depending on the target markets.
In southern Europe, producers in Spain and Portugal have increased their rebar prices in their local markets. Despite weak demand, a similar trend has been seen in Germany, Poland and Latvia. However, buying and selling activities in these countries have been for small tonnages transported by truck.
Some producers in Europe will suspend their production temporarily due to the Christmas and New Year holiday (and also due to current market conditions, i.e., weak demand). The coming period will show how the current uptrend will affect the markets in general before the holidays.