Turkish steel mills are trying to keep their rebar export offers stable but, with the influence of lower global quotations, their current offer levels are failing to gain acceptance from buyers and are under pressure. Generally, Turkish mills are trying to keep their rebar export offers at $490-495/mt FOB on actual weight basis, but buyers’ price expectations are way below these levels due to lower scrap quotations. Accordingly, Turkish rebar producers’ sales transaction prices for small tonnages have fallen to $480/mt FOB on actual weight basis, while buyers’ price expectations for large tonnages have declined to $465-470/mt FOB. However, having limited their supply volume by cutting production, Turkish suppliers do not consider this price range to be acceptable yet.
Despite the 50 percent Section 232 duty, buyers in the US are still showing some interest in Turkish rebar. SteelOrbis has been informed that negotiations are ongoing between Turkish suppliers and US buyers at $772/mt DDP loaded truck at US Gulf ports, including 50 percent duty.
Additionally, as of April 1, the European Union (EU) announced that the new “other countries” quota for the April-June period which is 133,004 mt for rebar has been opened to all countries, including Turkish mills. SteelOrbis has been informed that there is a total of 9,272 mt of rebar waiting at EU ports and most of this tonnage is thought to be Turkish rebar. Meanwhile, Turkish mills have started negotiations with EU-based buyers for sales from the new quota for the 2019-2020 period which will be initiated on July 1,but buyers are more cautious since Turkish suppliers had exceeded their previous quota.
In the meantime, the negative influence of very low-priced Iranian rebar offers has continued to be seen. Turkish rebar exporters are now unable to conclude sales to Lebanon, once one of their traditional export markets, due to Iranian competition. Also, they are unable to meet demand in the Southeast Asian market since Iranian rebar offers to this region are at $440/mt CFR.
The increases observed in global iron ore prices amid the downtrend of scrap prices are creating confusion for market players, causing them to be in no rush to conclude rebar purchases, while sellers are also cautious as regards their pricing strategies for the same reason. As a result, having been unwilling to reduce their rebar export prices immediately, Turkish mills may make a downward revision in their rebar export quotations in the coming week due to the pressures they are facing.