In the middle of last week, the European Commission (EC) announced its decision to impose provisional safeguard measures on 23 steel product categories, in the form of a 25 percent out-of-quota tariff. The provisional measures will be applied for 200 calendar days as of July 19. Within the scope of these measures, the EU's import quotas for rebar will total 714,964 metric tons. Turkish mills have already been concluding more sales to the EU recently, and, after the EC decision, expectations of an increase in European demand for Turkish rebar, albeit not in the short term, prevail in the market.
At the beginning of the current week, SteelOrbis was informed that a Turkish steelmaker concluded several rebar deals for small tonnages to the EU. Amid expectations of concluding more sales to the region, Turkish rebar producers have increased their domestic and export rebar prices on dollar basis. As a result, Turkish rebar export quotations have risen by $5/mt week on week to $545-555/mt FOB on actual weight basis, despite the lower import scrap prices in Turkey.
However, no other rebar sales to the EU from Turkey have been heard in the current week, even though Turkish merchant bar and wire rod sales to the region have accelerated. Market sources state that demand for Turkish rebar in the region is not strong. On the other hand, while the details of the abovementioned sales have not been confirmed, SteelOrbis has been informed that the sale prices were not below the level of $550/mt FOB.
In the meantime, demand for Turkish rebar in the US - one of the main markets of Turkish rebar exporters - has decreased due to seasonal circumstances, while US buyers are concluding rebar purchases in their domestic market, choosing between US domestic mill offerings and import inventory that has already arrived. Hence, demand for Turkish rebar in the US is still weak. The most recent rebar sale from Turkey to the US was concluded in the first week of July at $750/mt CFR on theoretical weight basis.
As a result of the rises seen in Chinese rebar export quotations in the second week of July, Turkish rebar producers once again gained a price advantage in Singapore and concluded sales to this destination last week at $540/mt FOB on actual weight basis.
On the other hand, demand for Turkish rebar in markets such as Israel, Yemen and Lebanon - where Turkish mills conclude regular sales - is weak and is not expected to revive in the short term due to the approaching Feast of Sacrifice in August.