At the beginning of the week Turkish longs exporters were forced to follow the upward trend. But they have been forced to move prices back to early June levels, because buyers started to resist upward adjustments. Besides, the burst of domestic demand has been indeed short-lived and deals on scrap have not yet been made. The further course of events will depend on who will be the first to give up: buyers, who will be forced to start restocking soon, or suppliers, who have been putting much effort to sell their material abroad for quite a long time.
As a result, July production of rebar is quoted to foreign markets at $740-750/t FOB, like a week ago, though some suppliers insist on the level of $755/t FOB. Thus, the margin of producers keeps high, considering that import scrap has been purchased at $490/t C&F at most in June.
Like last week, most foreign buyers refuse to accept quotations of Turkish rebar. Nevertheless, Egyptian trading companies have become interested in importing it, as their needs have substantially grown lately. However, they bid at $735/t FOB, and few suppliers agree to this level now. At the same time, Emirati buyers have decided to delay purchases despite shortage of rebar in the domestic market. They wait for local manufacturers to announce new prices in the second half of the month. Iraqi traders also refuse to sign contracts, insisting on the price by $25/t lower – $730/t EXW. Saudi buyers purchase the material domestically and source it from UAE and Qatar as needed.
Suppliers of wire rod have also faced buyers' resistance, even though the situation in this segment is usually more favourable. However, suppliers are more confident here, as they have started selling August output already, and some of them have even filled their August order books. But buyers believe that producers still have some volumes of July production and try to save it for the period of regularly low buying activity during Ramadan in Muslim countries.
Mostly August output is offered in the segment for semis. Traders say most suppliers keep their prices unchanged w-o-w, at $700-705/t FOB, but grant discounts of around $5-10/t while signing deals. Egyptian buyers are among the few, who actively purchase Turkish billet, because their country is short of semis. At the same time, July output of CIS square billet is quoted to Turkey at $700-705/t C&F on average. However, buyers may get discounts while signing deals, so some re-rollers are ready to purchase the material amid its limited supply in the local market.
( Source: www.metalexpert-group.com )