Turkish longs exporters are more organized this week. Although domestic rebar offers have lost $20-30/t since late July, the general range of export prices remains static, though most suppliers tend to focus on the lower end of the price range on the back of poor demand. Exporters in the wire rod segment have been forced to cut offers to stir buyers. Export quotations of billet, in turn, have been reduced after attempts to raise them a week earlier. Yet, the outlook is vague: further drop of longs prices is doubtful now due to limited supply of CIS billet. Thus, an expected decrease in rebar quotations by $15-20/t in the next two weeks has narrowed to $5-10/t.
Thus, Turkish sellers are still asking $720-735/t FOB for September output of rebar. Most suppliers have focused on prices at around $725-730/t FOB, though. As a result, whereas a week earlier only UAE received the lowest offers ($715-720/t FOB), now even smaller consumers may close deals at $720-725/t FOB.
This week, due to the start of Ramadan, buying activity in the Middle East has decreased even more. In particular, UAE consumers have cut purchases, having filled their stocks earlier. They have switched to wait-and-see mode, hoping quotations will drop during the next two weeks, though deals for small quantities of the material are reported at $720-725/t FOB actual weight. Iraqi consumers have been not quite active in early August too, though their inventories need to be refilled. As a result, prices for them have sunk by $10-20/t, to $760-775/t EXW, while contracts for small lots of rebar with delivery in early September have been signed at $765/t EXW in Iskenderun. Nevertheless, sellers expect Iraqi buyers will start booking larger batches in the second half of the month. Though Lebanon stockists have booked Egyptian material actively amid high construction activity in the country, they still need additional purchases. Thus, deals for small lots of rebar with Lebanese traders have been closed at $735/t FOB. Syrian customers need to replenish stocks too, but plan to start making deals by mid-August.
Prices in the wire rod segment have dropped by $10/t in a week, to $740-750/t FOB. Also, interest in purchases is detected in West Africa and South America. In particular, Brazilian buyers are ready to buy wire rod at $730-740/t FOB; yet, suppliers do not agree to such reductions.
Only the lower end of the price range for Turkish billet has slid by $5/t. Considering quotations of CIS billet, which are only by $5-10/t lower, foreign customers have become interested in the material. Metal Expert learns about a deal with Syrian re-rollers at $690/t FOB. Besides, market payers report import duty for CIS billet has grown to 4.5% in Syria, which may stimulate purchases from Turkey. To Egypt offers of $690-700/t FOB are rather attractive, so a number of contracts have been signed.
Billet from the CIS is available to Turkey at $695-700/t C&F, which is only by $25-35/t lower than current export quotations of Turkish rebar. As a result, local rebar suppliers are showing no interest in import billet. At the same time, structurals producers are not attracted by offers of CIS billet either, as the material is even somewhat cheaper in the Turkish domestic market.
( Source: www.metalexpert-group.com )