Turkey-based longs producers continue to struggle amid tough market conditions while facing increased production costs due to higher energy costs and consistently low demand for finished steel. As a result, Turkish mills have insisted on the lower import scrap prices, partially in order to be able to provide slight discounts to some of their customers.
In addition, the war between Israel and Hamas has created potential difficulties for steel sector participants with connections to the region. Particularly, rising oil prices have already been reflected in some freight rates in the Mediterranean Sea, while steel shipments to Israel, a large and important market for Turkey, are halted for now. In the January-July period this year, Israel topped the list of importers of Turkish long steel, importing 377,556 mt of rebar and 134,756 mt of wire rod from Turkey. In addition, according to some sellers, Turkey’s government has restricted the traffic of Turkish vessels to Israeli ports due to security reasons, which may result in additional shipping expenses for mills.
Currently, Turkish rebar export prices vary at $560-570/mt FOB for October-early November shipments, versus $565-580/mt FOB a week ago. A few mills are offering slightly higher levels, but they are difficult to achieve so far. A fresh rebar lot of around 5,000-7,000 mt is rumored to have been sold to Africa at $560-565/mt FOB this week. Moreover, a few southern European buyers are giving counterbids at $550/mt FOB to Turkey, SteelOrbis has heard. Most market players agree it is safe to say that Turkish mills do not have much room to compensate for the recent energy price hikes this month. If export sales proceed like this, some Turkish mills will consider reducing their production further, carrying out maintenance works or idling their production.
In the local rebar market, due to the slow trading in the export segment, a few Turkish mills have become aggressive in terms of pricing. According to sources, one Marmara-based mill in a sales campaign succeeded in selling around 35,000 mt of rebar at $565/mt ex-works in the first two days of the current week. In addition, another Marmara-based mill is currently offering rebar at $575/mt ex-works today. Most mills in the Izmir and Marmara regions were offering rebar at $585-595/mt ex-works a week ago.
In the wire rod segment, Turkish official wire rod offers are standing at $575-580/mt FOB, versus $580-590/mt FOB, for October-early November shipments. In the Turkish domestic market, the general official wire rod price range varies at $585-610/mt ex-works, falling by $5/mt on the higher end, but the higher end still seems difficult to achieve under the current market conditions.