Longs producers in Turkey have not been left with much choice other than to decrease their prices, caught between high import scrap prices, scarce import billet availability with most offers being with long lead times, and slower rebar sales. Particularly in the local market, which absorbs around 70-75 percent of total production, the weak demand and the aggressive price policies of some mills have generally brought prices down over the past week. In addition, some companies have been cutting production, in order to minimize the pressure. Export offers for longs from Turkey have followed suit, while Turkish mills have continued to face low demand in addition to strong competition from North Africa.
Turkish rebar producers are aiming to apply aggressive pricing policies in order to cover the spread between their production costs, firm import scrap prices and weak rebar sales both in the local and export segments. In addition, a few mills have either cut their production or have started maintenance works in order to reduce pressure on the supply side. A few Turkish mills are also expected to start their maintenance works in February, SteelOrbis has heard. Also, Ramadan will be starting on Thursday, February 19, in the Middle East, and so progress on the demand side might take longer.
In the local Turkish rebar market, low domestic demand coupled with rather bearish sentiments regarding weather conditions and the approach of Ramadan, the mills have cut their offers by $5/mt. Basically, the levels which were workable last week have now become official offers. Moreover, several producers have been cutting production by halting some of their rolling lines to carry out maintenance. “The point is to be under less pressure in terms of high scrap prices when Turkey has currently no power over the raw material pricing and, of course, not to have rebar piled up and to avoid losing more money,” a trading source commented to SteelOrbis.
Currently, a few Marmara-based mills are offering rebar officially at $570/mt ex-works, while Izmir-based mills' official rebar prices are standing at around $550/mt ex-works, also down by $5/mt. One of the key Iskenderun region-based producers is still offering rebar at around $545/mt ex-works. The overall workable rebar prices have hit $545-560/mt ex-works, versus $545-575/mt ex-works for large tonnages, while in the Marmara region smaller lots can still be booked at $565-570/mt ex-works.
Over the past week, Turkey’s rebar export prices have dropped by $10/mt - following a period of hike attempts in the first half of January - to the level of $550-570/mt FOB. Currently, Turkish mills are offering rebar for February shipments, which means they have certain difficulties with sales, but also that they are offering material with the shortest lead time among their competitors.
In the wire rod segment, official export prices have also fallen by $10/mt on the lower end of the range, to $560-580/mt FOB for February shipments. Most international buyers are exerting pressure for further discounts. Locally, wire rod prices in Turkey have also decreased by $10/mt on the lower end as well, to $550-580/mt ex-works, depending on the region.