Turkish long products market outlook

Prices in Turkish long products market have continued following an upward trend. Especially strong demand in rebar supports price increases. In Turkish local market, rebar price for 12 mm dia. material is at around TRY 720-740/mt, including VAT ($457-469/mt, excluding VAT). Demand for rebar is strong, scrap prices are rising, and exports are strong. Despite the favorable market conditions, trading firms are uneasy. Local prices have indicated an increase of $80, excluding VAT, since February. Facing increased demand due to the seasonal factors, trading firms, which cannot predict how long this increase will continue, have become hesitant about their price strategies for April. In the local merchant bar market, demand was not strong in the first half of March, despite rising prices. Trading firms, which believed that prices would continue rising as of last week, have slowly brought some kind of activity to the market. This week, equal angle prices have been at $470-480/mt ex-works, while flat bar prices have been at $480-490/mt ex-works, excluding VAT. Although there is some activity in the market, demand in the local market has yet to increase. One of the major reasons for this is that the trading firms, which are not used to merchant bar producers' quick reaction to the price increases, could not keep up with these quick increases. Similar to the rebar market, players in merchant bar market are uneasy since they cannot predict to what extent the prices will increase. Overall, rising scrap prices and strong exports create the expectation that the prices in the local long products market would retain their levels in April. However, market players are worried, especially after the bad experience in 2005 and due to the serious rise in the prices in a six-week period.