Quotations for reinforced bars are slightly up in the Middle East region. In December, local prices moved by USD 30 pert onne to 40 per tonne in Egypt and the UAE, a little increase was also observed in Saudi Arabia and Lebanon. This enabled Turkish and CIS producers to lift their quotations marginally.
As traders inform, in early December, Turkish companies offered rebar for USD 615 per tonne to USD 630 per tonne fob but that price was accepted only by Iraqi consumers. Ukrainian exporters also lifted their quotations to USD 600 per tonne to USD 610 per tonne fob but their material is not going easily.
The current price movement is a consequence of price increases for billets and scrap. In the near future both raw materials and semis are likely to go up further because of limited supply. The spread between billet and rebar price in Turkey reduced to USD 30 per tonne to USD 35 per tonne, so rolling mills have no other choice but to lift quotations for their products in spite of unfavorable demand.
The demand for construction steel in the Middle East increased a bit compared to the near zero levels of October and November but in total the market remains weak. Turnovers in the construction industry however, are still far behind the before downturn figures. Further, a majority of the large projects are financed by governments so preference is given to the national producers of reinforced bars.
Experts believe the revival of construction industry will be occurring before March or April 2011. Only then it will be possible to decide on serious import volumes. Currently major requirements in rebar in the region are satisfied by local suppliers.
Now billet seems to become more demanded commodity in the region than rebar. The cost of material from CIS and Turkey is in the range of USD 605 per tonne to USD 625 per tonne CFR which is only inessential lower than finished steel products. It seems like reinforced bar quotations in Middle East to go on slow move up this winter. With remaining quite weak demand producers have no opportunities for price decrease in the nearest future.