The softening seen in raw material and finished steel last week finally began to be felt in the European merchant bar market. The reason for the delay is that the merchant bar market usually reflects developments seen on the scrap and billet side a little later than the other finished steel markets. In addition, the low levels of demand have also continued to affect the European merchant bar market in a negative way.
In order to determine the current state of demand in the Turkish domestic merchant bar market, the sectors that consume merchant bars should first be taken into consideration. Despite the approach of the local elections in Turkey, no major development has been observed as regards major new projects, and seasonal conditions as well as the incipient downtrend of prices have led demand to stand at low levels. Last week, in the Turkish domestic market, merchant bar prices stood in the range of TRY 800-830/mt ($497-515/mt) ex-works.
Looking at the export side, the only development is that some producers have softened their prices, while others have refrained from giving export offers considering their full order books. There are some mills who do not want to lower their offers below the level of $530/mt FOB, while other mills have started to give offers at the level of $510/mt FOB. In particular, some mills are hesitating to give offer prices, as they are unable to forecast how long the softening seen in import scrap and billet prices will last. Recently, bookings have continued to be concluded to Africa. Meanwhile, it is observed that demand for 140 mm IPE from, in particular, Iraq and the Middle Eastern markets has been showing a certain increase nowadays.
As for Spain, the mills did not revise their prices last week as anticipated. Extra and base prices are expected to be revised by the mills this week. Scrap will be determining factor for this price revision in Spain, too. This uncertainty observed in Spain was also the main reason behind prices remaining unchanged last week in Portugal. Looking at Italy, prices have shown some softening; however, demand has continued to move on a slack trend. On the export side, it is heard that Italian mills' export offers to Greece have been standing at the level of $410/mt CIF. Also, in Greece demand has been on a sluggish trend, just like in other countries.
The Spanish, Turkish and Italian mills, who have been focusing their attention on the African market where demand has been showing a better performance for the past few months as compared to other export markets, have continued to seek alternative markets for their exports.