Coming up to the end of the current week (sixteenth week of 2009), a rising trend has started to be observed in the price levels of Turkish rebar producers' offers to North Africa and the Middle East. Due to strong end-user demand from Egypt and the UAE and also demand for prompt rebar shipments coming from Egypt in particular, Turkish rebar producers' offer prices to Egypt are currently at higher levels as compared to Turkish rebar offers to other markets.
Besides the end-user demand for rebar, rising scrap and billet prices have also been providing support for the rebar price increase. While it is mentioned in the market that the Turkish producers have filled their order books until mid-May, rebar export offers given from Turkey are currently at the range of $465-490/mt FOB.
Meanwhile, rebar prices are also strong in the local Turkish market under the influence of the international markets. However, although the current warmer weather favors construction activity, end-user demand has not yet reached the desired levels in Turkey. Since prices are registering an uptrend in spite of the sluggish end-user demand, local market traders have been feeling uncomfortable and are not sure whether they should buy or not. As of today, April 17, the rebar price level in the local Turkish market is around $480/mt ex-warehouse excluding VAT.
Looking at the UAE rebar market, a rise in activity has been observed in this country, triggered by the five percent import duty. Rebar price levels have registered a slight increase due both to the increased prices from Turkish producers and also to the five percent import duty. Importers in the UAE are currently avoiding increasing their stock levels. It is heard that the Turkish producers have concluded some deals at $465/mt CFR Dubai on theoretical weight basis. It is expected that the price levels of Turkish rebar offers to the UAE will likely increase since scrap and billet prices have been going up and also Turkish rebar producers' order books will have filled up some more thanks to the demand coming from Egypt. Lack of cash flow and the slowness in construction sector (due to the hot weather) are the main problems facing the UAE market for the time being.
End-user demand is currently slow in the local Saudi Arabian rebar market. While local rebar producers in this country are observed to have kept their rebar prices unchanged from last month, this situation has been boosting end-users' confidence in prices. In general, the price uptrend in rebar offers to the Middle East may also help boost end-user demand in the Saudi Arabian domestic market.