Contrary to the expectations of foreign customers, Turkish long product exporters have pushed up quotations of the material to be produced in late September-October, even despite steadily low demand. Such moves are explained by still high costs of CIS square billet, which is currently in short supply, and a gradual recovery of buying in the domestic market. Although export offers of square billet have gone down somewhat, they are only $15/t below the domestic rebar quotations. As a result, Turkish suppliers will probably keep on raising prices for both longs and semis.
In particular, at the end of this week rebar exporters have brought quotations up by $5/t to $710-720/t FOB, though prices are mostly staying at the top end of the price range. Meanwhile, some suppliers are trying to sell rebar at $725-730/t FOB.
To Iraq, rebar price has dropped by $15-20/t to $740-745/t EXW. As a result, Iraqi buyers who have rather low inventories have started signing contracts for 2,000-2,500-tonne batches shipped from Iskenderun at the bottom end of the price range. In future, demand is expected to become even stronger in Iraq, so Turkish sellers will manage to raise offers to this market to $750-755/t EXW by September. Besides, the situation in other markets (including domestic one) is also expected to improve.
At the same time, buyers from UAE were signing contracts for small batches of the material early this week at $705/t FOB ($720/t C&F, theoretical weight basis). However, as soon as prices increased, most of them adopted a wait-and-see attitude having accumulated sufficient stocks and waiting for new offers from local mills, Moreover, whereas earlier Turkish suppliers could quote the material to this market by at least $5/t lower than to other countries, now they have withdrawn offers because of an upturn in demand expected in September allowing them to sell the material at higher prices.
Moreover, consumers have become more active in Egypt, where domestic prices are very high and producers are unlikely to make cuts considering current situation in the segment for square billet. As a result, buyers have been signing contracts for rebar at $710/t FOB, just like Jordanian customers. Buyers from Syria and Lebanon are in no hurry to book Turkish rebar, though offers were at $715-720/t FOB by the end of the week. Whereas Lebanese trading companies are able to resume purchases fearing that prices may go up, Syrian traders will be less active amid rather poor demand in the home market.
Export quotations for wire rod have surged by $5-10/t in a week, to $735-750/t FOB, deals still being made with buyers from South America and North-West Africa. In particular, Brazilian customers have been booking the products at $730-735/t FOB.
Meanwhile, square billet quotations have dipped by $5/t in the period, to $685-695/t FOB. Market players say the price may be cut to $680-690/t FOB while closing deals. Notably, the material with September shipment is offered at the top end of the price range, that with October shipment – at the bottom end. Square billet from the CIS is priced to Turkey at $700/t C&F, which is completely unacceptable taking into account current rebar prices.
( Source: www.metalexpert-group.com )