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Turkish exporters still have difficulties selling longs - 05 Jul 11

Given low buying, Turkish exporters of long products keep cutting prices hoping to stimulate buying. Nevertheless, few buyers have decided to conclude contracts at new levels, most of them thinking quotations will go down further. However, a gradual rise in purchasing activity in Turkey and thus higher domestic prices, as well as a forecast resumption of scrap purchases in the short term will prevent longs quotations from decreasing further.
Nevertheless, Turkish rebar of July rolling is available to foreign customers mainly at $705-710/t FOB, which is by $5-10/t lower than a week ago. Some suppliers say they can sell the material in the domestic market by at least $10/t higher and keep export prices at $715/t FOB. Meanwhile, traders note some sellers have cut prices to $700/t FOB, when closing deals.
However, even such moves of Turkish exporters have had no effect. In particular, rebar is offered to the UAE at $720-725/t C&F Dubai theoretical weight or $705-710/t FOB actual weight, but no deals have been reported by this time. Despite strong rebar demand in Saudi Arabia, imports of the material from Turkey do not rise so far, since most of construction works in the country will be completed by mid-July, whereas import products will be delivered only in early August at best. In general, many customers from the Middle East prefer to wait and see, not willing to overpay, though in some countries buyers refuse to sign contracts due to unstable national currency (for example in Syria).
As for Egyptian traders, they are in no hurry to purchase rebar, waiting until local suppliers announce their offers. By this time, only Ezz Steel has released new prices, leaving them at the last month’s level – $722/t EXW (excluding 8% tax). As a result, Turkish suppliers, who quote rebar at $715/t C&F, theoretically have good chance to make new deals, although local customers are in no need to buy import products, since they have already purchased large batches of rebar from Turkey and CIS earlier. Besides, construction activity has slowed down in the country.
It is also unlikely that Turkish suppliers will sell large batches of wire rod (August production) to the Middle East, given rather moderate demand for the product and attractive offers from China (FOB-quotations are by $15-35 lower). As a result, Turkish exporters’ reductions by $10/t over the period under review have attracted buyers from neither Middle East, nor Africa and South America. Nevertheless, a deal probably for a large batch of Turkish wire rod was reportedly closed early this week at $720/t FOB.
Suppliers of August semis output have also decided to move prices down by $5-10/t in a week, though only few buyers from the Middle East (including UAE) showed interest in small lots of the material. Meanwhile, Ukrainian square billet produced in July and August is quoted to Turkey at $765-770/t C&F ($5-10/t down over the same period), while local companies are ready to deal only if prices lose another $5-10/t.
(Source: www.metalexpert-group.com )
Jul 5, 2011 08:22
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