Turkish producers are under pressure in their longs export sales amid the ongoing negative sentiment in the import scrap and billet segments. Moreover, international demand for rebar remains rather weak as buyers prefer to watch the raw materials trend and to take their time before concluding new purchases. As a result, some discounts were provided by the mills, but it is widely believed that, in order to avoid further significant price drops, the mills will have to either find large export sales destinations or they will have to slow down production, which already is not operating at maximum capacity. Unfortunately, higher exports will hardly happen in the near future, while domestic demand, though continuing, is not sufficient enough to cover the bigger part of production.
Currently, ex-Turkey rebar prices are available at $670/mt FOB, versus $700-715/mt FOB a week ago. A few Turkish suppliers have stopped quoting in these unclear market conditions, while some mills are reportedly ready to deal at $660/mt FOB. “Rebar is down, but there is still big room if you consider $250/mt tops the production cost from scrap to rebar and if taking $330/mt CFR as the latest traded scrap price,” a trader said. As a result, based on scrap prices, the rebar levels should be below $600/mt FOB, but mills are able to maintain their wide spread for now. Many sources believe that they are supported by ongoing local sales, though which are not so lively, and also they are running at reduced capacity, which is estimated by some at below 70 percent.
No fresh rebar deals have been heard so far, although some might be generated during the current fair in Dusseldorf, specifically to the European market. However, Turkish presence is limited by the 86,000 mt rebar quarterly quota due to begin on July 1 and this volume is expected to be filled in the short term. “There are certainly already vessels expecting customs clearance in Europe, so we might not have any [volume] for sale under the quota,” a source told SteelOrbis.
In the local Turkish market, rebar prices vary at $660-685/mt ex-works in the Marmara and Izmir regions, with the lower end considered to be workable. Sources report offers at $645/mt ex-works are also available in the Izmir region for serious buyers. Moreover, local traders’ rebar spot prices were at $639-669/mt ex-warehouse on June 21.
In the wire rod segment, Turkish export prices for July shipments are available at $690/mt, versus $740-750/mt FOB. No fresh wire rod deals have been heard for now.