Though buying activity in the Middle East is low due to religious holidays, exporters from the Azov-Black Sea and Mediterranean regions have started to resist the downward trend, contrary to buyers' expectations.
In particular, stockists in Arabian countries assumed they would be able to buy rebar at $700-705/t FOB or cheaper in the second half of August. Yet, Turkish exporters have lifted quotations up to $710-720/t FOB citing better demand in the domestic market. Besides, they are not going to stop, since those who do not have their own billet production will have to buy it at higher prices. At present prices for billet are only $15-25/t lower than rebar export offers.
Re-rollers (Turkish in particular and those from the rest of Middle Eastern countries) will hardly be able to get big discounts on deals for billet. Supply being limited, most CIS suppliers keep offers at $680-685/t FOB and are not going to back down considering there is pent-up demand in the region. Only Metinvest International S.A., Electrostal and Metalloinvest still have an opportunity to buy September production.
As a result, Turkish longs producers currently doubt they are capable to purchase semis, but remain pretty optimistic about finished product sales. They believe Iraqi and, probably, Egyptian buyers will become active soon, as rebar quotations in these countries may go up on higher prices for semis.
However, in case Turkish exporters succeed in implementing the increase, they are not going to spend much on scrap purchases. They have got almost enough material at the moment to feed production for the next month (only around 150,000 t of the material is yet to be booked). Besides, consumers have adopted a wait-and-see policy signing deals only with suppliers who agree to give concessions, including those from alternative markets (Canada, for instance).
( Source: www.metalexpert-group.com )