As expected, Turkish longs exporters are still in a difficult situation in mid-April. Foreign buyers still show slack demand and political situation is complicated in the Middle East and North Africa. As a result, the suppliers have been forced to make cuts again. However, the decrease of prices was smaller in the mid-month as compared to the beginning of the week considering new deals on scrap have been made in mid-April, even though at low prices. Under current conditions a number of companies have even decided to leave the market until the situation gets clearer.
At the beginning of the week Turkish producers dropped prices for their May production of rebar to $645-655/t FOB, $10/t down w-o-w. Moreover, some manufacturers were ready to price their product as low as $640/t FOB in view of extremely weak demand for it. However, they have immediately raised offers to $655-660/t FOB after signing deals on scrap. However, some suppliers still grant discounts.
In particular, this week some small batches of rebar have been sold at $655/t FOB to Lebanon and at $645/t FOB to Syria and the UAE, where domestic prices are much higher. Other Middle Eastern and North African buyers either believe that prices may go further down soon and stick to wait-and-see attitude or purchase domestic material.
At the same time, buying activity in Central and South America is booming, as construction sectors in the regions have started to recover. In particular, Turkish rebar has been reportedly booked to Brazil, where preparations to FIFA World Cup 2014 are currently under way, at $660/t FOB.
Domestic demand for wire rod is weakening, so quotations of June production of mesh-quality product have decreased more notably than rebar prices – by $15/t. So, now it is priced by $25-30/t lower than rebar, against $35-40/t in early April. As a result, Brazilian buyers have also started purchasing Turkish wire rod. Besides, African consumers are also buying it in mid-April. Middle Eastern buyers are still reluctant to purchase wire rod, though some countries, including Iran, need it.
Export quotations of billet have lost $20-25/t w-o-w, primarily due to a slump in domestic prices. Foreign buyers also show weak demand for it, though. However, square billet producers have unanimously left the market until the next week after they signed new contracts on scrap, as they fear to undersell their material in view of firmer demand from local re-rollers. Besides, price difference between billet and rebar has increased from $25-30/t to $50/t. CIS exporters quote their square billet at the similar levels on average. Traders offer CIS billet at $600/t C&F, while Ukrainian and Russian manufacturers are ready to price it no lower than $610/t C&F.
(Source: www.metalexpert-group.com)