Business activity for Turkish long steel, particularly in the domestic market, is almost at a complete standstill due to the recent negative developments in the currency market. In a single day, the Turkish lira lost around six percent of its value and the exchange rate has hit and exceeded $1 = TRY 23 on June 7. This situation and the overall negative expectations for further developments in the financial sector are weighing heavily on the daily steel trade and are resulting in rapid Turkish lira price hikes for longs. A few mills have even closed their rebar sales for now, aiming to see some stabilization in the currency. In the export segment, most Turkish mills are focusing on regular destinations and are aiming to compensate for their lower domestic rebar sales with export deals, since the weak currency provides a good advantage. However, the general sentiment on the international demand side is still sluggish and not much demand is reported.
Since the beginning of this week, a little over 10,000 mt of rebar have been traded in the Marmara region at TRY 16,400-16,600/mt ex-works and another 10,000 mt are reported to have been sold in the same period in the Izmir region at TRY 16,500-16,560/mt ex-works. Both ranges are netting back to around $645-650/mt ex-works, according to $1 = 21.6 rate valid at the time.
Currently, a few mills in the Marmara and Iskenderun regions were offering rebar at TRY 17,250-17,500/mt ($633-642/mt) ex-works earlier today according to the $1 = TRY 23.1 rate, versus TRY 15,860-16,105/mt ($640-650/mt) ex-works a week ago at $1 = TRY 21. According to sources, one Marmara-based mill has even tested TRY 18,150/mt ($666/mt) ex-works for 1,000 mt lots of rebar in the afternoon.
As a result, some local traders seem to have restocked material to be on the safe side if a further price hike in the import scrap occurs or if the depreciation of the Turkish lira against the US dollar accelerates. “There are sales, but we cannot say it is healthy. People are acting according to their expectations and are trying to minimize risks, but the reality is there is no money in the market to back trade, at least not right now,” a trader told SteelOrbis.
Ex-Turkey rebar export offers are available at $630/mt FOB for late June-July shipment, falling by $10/mt over the past week, while a few mills are testing $640-650/mt FOB in order to be on the safe side due to the positive sentiment in the import scrap segment. A 10,000 mt of rebar lot has been traded to Yemen at $635/mt FOB on actual weight basis for July shipment.
In the wire rod segment, a few mills are offering wire rod at $640/mt FOB for late June-July shipment, down $10/mt over the past week. In the local Turkish market, the official wire rod price varies at $635-670/mt ex-works, versus $652-675/mt ex-works seen a week earlier.