September - second blossom for rebars in Mediterranean and Middle East

Turkish domestic rebar prices rose to $540/mt ex-works in mid-September. However, last week, rebar prices fell to $530/mt with a slight adjustment. The continuous fluctuation of the US Dollar has caused difficulties in price stabilization. Rebar prices for 12 mm vary in a price range of TRY 920-950/mt ($521-538/mt). The month of Ramadan has not influenced the market significantly. Since construction site work is generally very intense in September prior to winter, there has not been much of a slowdown in demand. However, most of the mills were focused on production for exports due to the delayed export orders in early September. As a result, availability of rebar in the domestic market has been low. The strong demand, along with the scarcity of rebar, has caused prices to increase sharply. Trading firms, which expect that mills will be able to supply more rebar to the domestic market in October, foresee a slow market movement for that month. Turkish mills, which raised their rebar export prices to $530/mt FOB Turkish ports due to the high domestic rebar prices, did not see much demand for the product at these levels. In spite of the strong domestic European market in early September, importers had not shown much reaction to the increasing prices. Importers in the UAE had been expecting prices to drop in September. However, due to the lack of downward movement in the prices, UAE importers decided to conclude purchases at $525/mt CFR on a theoretical weight basis by paying $10-15/mt higher. With the slight decline in the domestic market, current offers are at $515-525/mt FOB Turkish ports on actual weight basis. However, the slowdown in European and Gulf markets may create price pressure on the Turkish mills. South Europe markets such as Italy and Spain started September with a strong domestic market. Several trading firms reduced their stocks in July due to the expectation of a weak market after the holiday period. However, they saw that the post-holiday market had not weakened as they had anticipated. In fact, prices increased in South Europe with purchases being made. Domestic rebar prices in Italy increased to Euro 475-480/mt. In addition, AENOR-certificated rebar for 12 mm in the local Spanish market increased to Euro 560/mt delivered to warehouse. However, there is a slowdown in these markets, covering this week and last week. Rebar prices in Italy dropped almost Euro 30/mt to Euro 450/mt ex-works. The price decreases in Portugal during September have not influenced the Spanish market much. However, the Spanish market started to slowdown with rebars ex-Portugal being directed to Spain. There are various movements in the Middle East and Gulf regions. The prices in Egypt have been on an increasing trend in September. Rebar offers for exports rose from $490-500/mt FOB to $505-520/mt. In addition, the domestic rebar market in Egypt also indicated a rise. In Iran, there was a good market outlook with the strong demand. However, it has been heard that domestic prices fell in Iran due to huge rebar exports from Turkey. The recent rebar booking ex- Turkey concluded in Iran was at $520-525/mt FOB Turkish ports. Rebar prices in the UAE indicated a decline. The prices at the beginning of September, which were at AED 2,100-2,150/mt ($572-585/mt) on a theoretical weight basis for 5-months deferred payment, fell to AED 2,050-2,060/mt ($558-561/mt). Customers in Algeria have concluded bookings from Italy at Euro 445/mt FOB due to Mittal Steel Kriviy Rih, which focused on Russian domestic market because of its strength. In addition, Algerian importers booked only 8 mm rebar cargoes from Turkey in September. We mentioned in our previous articles that after the declines in July and August, there could be increases in the Mediterranean during September. This was confirmed when, despite the fall in Portugal, both Italy and Spain entered September with price increases and strong markets after the holiday. Furthermore, increases were also seen in the Turkish and Egyptian domestic markets as of September. The strong Russian domestic market led a rise especially in Ukrainian-origin rebar prices. Moreover, rebar sales ex-Turkey and Egypt were concluded in Russia. However, despite its strength, the Russian domestic market has slowed down slightly. There were some slight declines experienced in certain markets towards the end of September, due to scrap pressure and the slight decline in demand. The overall expectation is that October will not be at the same level as September. However, some market players expect a slight revival in the Middle East and Gulf towards the end of Ramadan (mid-October) and expect US importers to enter the market for January arrivals. This situation may trigger the market again towards the end of October.