Turkish longs suppliers have been forced to reduce their domestic offers. Construction activity is moderate in the country, while traders’ stocks remain quite high, which enables them to refrain from new purchases for at least a couple of weeks. Besides, producers cannot point to contracts for scrap, quotations of which have dropped further. In this situation buyers expect prices for local long steel to keep falling.
Thus, offers of July rolling of rebar have moved down by TRY 30-40/t ($16-21/t) in a week, to TRY 1,345-1,370/t EXW. Besides, prices in the US dollar terms have dropped more substantially on weakening of the national currency – by $27-33/t, to $704-717/t EXW. The prices in Turkish lira are shown inclusive of 18% VAT, prices in dollar terms are VAT-exclusive, the exchange rate is $1 = TRY 1.62. Yet, steel traders report some suppliers, having sold large volumes of July production earlier, are quoting by TRY 10/t ($5/t) higher than the upper end of the general price range, having no need in quick sales.
At the same time sellers in wire rod segment, where supply is still tight in view of production problems at some plants, are making good use of this fact and keep their offers by $49-78/t higher than rebar prices. Suppliers in Iskenderun, Isdemir in particular, have cut prices only slightly. Besides, Isdemir has stopped wire rod production for a week due to repairs. As a result, its prices are the highest in the country, which may force local consumers to start buying from other regions of Turkey.
As for semis, deals for billet are rare, which is attributed to high prices for it in comparison with rebar quotations (the spread is $34-37/t). Still, sellers ascribe it to offers of August production, as well as expectations that large lots of the material will be sold ahead of Ramadan.
( Source: www.metalexpert-group.com )