After the first week of January, Turkish rebar export prices had been moving on a downward trend due to the softening of import scrap prices and also due to the weakness of demand for Turkish rebar in the export markets. With the downtrend of import scrap prices in Turkey gaining momentum as of the beginning of the current week, Turkish rebar offers have continued to decline, decreasing by $11/mt on the lower end week on week to $414-455/mt FOB on actual weight basis.
With their decreasing price offers resulting from the rapid declines of global scrap prices, Turkish rebar exporters have gained a pricing advantage in the Far Eastern market, where buyers usually meet their import rebar needs from China. With this pricing advantage in the export markets in the absence of Chinese suppliers, who have been preparing for the Chinese New Year holiday, Turkish steel producers have resumed their rebar sales to the Far East this week. Following the previous rebar sales from Turkey to the Far East, which were concluded in the second week of December last year, a Turkish steel producer has concluded a rebar sale to Singapore this week for a total of 50,000 mt at $425/mt CFR on theoretical weight basis. According to market sources, demand for import rebar and billet from Turkey in the Far East increased when Turkish mills reduced their quotations.
Meanwhile, Turkish producers’ rebar offers to the US, where domestic rebar prices have maintained their strength, have remained stable week on week at $460-465/mt CFR on actual weight basis. However, demand for Turkish rebar in the US, which was already weak, has almost ground to a halt this week since Turkish rebar bookings by US-based buyers will from now on have delivery dates in March, whereas the preliminary results of the ongoing antidumping and countervailing duty cases against rebar imports from Turkey will be announced in late February. Under these circumstances, demand for Turkish rebar in the US is not expected to recover in the short term, at least not before the preliminary duties are announced.
On the other hand, UAE-based buyers, who are waiting for domestic producer Emirates Steel Industries (ESI) to announce its rebar prices for February production before deciding whether to conclude deals for Turkish rebar, have started to exert downward pressure on Turkish rebar offers due to the sharp declines in global scrap prices. Meanwhile, Turkish mills are not very eager to give rebar offers to the UAE since they want to determine their pricing policy depending on the trend of scrap prices. Although Turkish producers have offered rebar to the UAE at $425/mt CFR on theoretical weight basis during the current week, this price level was no longer available following the rapid fall of import scrap prices in Turkey. According to market sources, UAE-based buyers’ firm bids for Turkish rebar are at $400/mt CFR on theoretical weight basis, but Turkish producers are unwilling to reduce their offers to this level.
As for the Egyptian market, where domestic rebar bookings are also slack, demand for Turkish rebar is still weak since the latest situation regarding the ongoing antidumping and countervailing duty investigation in the country against rebar and wire rod imports from Turkey is still unclear. Last week, Turkish rebar offers to Egypt were at $425-430/mt FOB on actual weight basis. While this price range is no longer available, Turkish mills are unwilling to give new rebar offers to the country due to the weakness of demand for Turkish rebar and also as they want to gain a clearer picture of the situation regarding import scrap prices for Turkey.
While the surprisingly rapid declines in global scrap prices have prompted caution among finished steel buyers this week, the situation in terms of demand in the coming days has gained importance as regards the determination of prices of finished steel and scrap.