Weaker euro may give European rebar the advantage in Turkey’s export markets

The Turkish lira weakened further this morning, May 16, against the US dollar, with the $/TRY exchange rate increasing to 1.83, while the euro has lost weight again, with the €/$ exchange rate dropping to 1.268. With the weakening of the euro against the US dollar, European long steel export offers have now become more advantageous compared to Turkish offers. Italian and Spanish rebar export offers are currently standing at €500/mt FOB and, given that these offers equal $635/mt FOB on dollar basis with the current exchange rate, European offers are approximately $10-15/mt lower as compared to Turkish rebar offers at $645-650/mt FOB.
 
Lower rebar prices from Europe may affect Turkish rebar exports negatively particularly to the North and South American markets, which received 15 percent of Turkey's total rebar exports in Q1. As the euro is expected to lose more against the US dollar, European rebar offers may then drop even below €500/mt FOB. In this event, Turkey's rebar exports to South America and North Africa may lose ground against the more attractive European prices.