Turkish rebar exports remain weak as prices are found high by buyers in the global arena, despite a slight decrease in values this week. On the other hand, rumours are circulating of rebar imports into Turkey from Malaysia and Egypt. However, these are not yet confirmed.
The Malaysia-origin rebar deal was heard at around $710-720/tonne cfr Turkey for 40,000 tonnes.
On Thursday, export offers for rebar stood mostly at $750-755/t fob Turkey actual weight, down from $760/t a week earlier. Offers for mesh-quality wire rods, meanwhile, were at $765-780/t fob.
Export sales remain at close to nil. Only small-volume sales to Yemen, Israel, and Ethiopia are being concluded at around $750/t fob actual weight. While export sales are not the priority for Turkish mills amid the strong domestic market, global competitors are seen replacing Turkey’s volumes in export destinations. In Israel, the largest export destination, Russia’s share in rebar imports is seen to have exceeded Turkey’s. Even Italian producers are offering rebar in the Israeli market today, as are Middle Eastern mills.
Market participants believe Turkish mills would agree to sell rebar at around $740/t fob if they receive firm bids, as their margins would allow for this decrease at current production costs.
A trader tells Kallanish: “I don’t think the spread between scrap and rebar is above $250/t after the declines seen in energy costs since the beginning of the year. Considering scrap at around $457/t cfr, they should have a sufficient margin.”
Some market participants think the spread is much lower, at around $230/t for large-volume producers, as capacity utilization has also increased.
While Turkey’s exports, which have been on a downward trend since mid-2022, are continuing to decrease each day, producers in the global arena are seen eyeing billet and rebar sales into Turkey. Rebar prices in other regions are notably below Turkish market levels.
Despite the rumors, most market participants find a Malaysian-origin deal too risky as previous rebar import trials from countries with which Turkey has a free trade agreement failed to meet customs requirements. On the other hand, during Turkish steel producers’ meetings with government officials and contractors, authorities rejected contractors’ requests to allow rebar and billet imports without duty.
For rebar production, Turkish mills find scrap prices competitive compared to billet, as billet offers from various origins are at $620-665/t CFR levels. On the other hand, a further rise in scrap prices does not seem likely at present, as almost all suppliers have cargo to sell in the market. Although a US cargo was confirmed sold at $462/t cfr for HMS 1&2 80:20 and $482/t cfr for P&S, Kallanish has excluded this from its daily assessment as there are same-origin suppliers who are ready to sell at lower levels.
In Turkey’s domestic market, demand was weaker on Thursday compared to a day earlier. Prices stood mostly unchanged at $750-765/t ex-works. No consensus was heard reached on the stabilization of rebar prices during the latest meeting with TOKI (The Turkish Mass Housing Development Administration) and contractors.
Source : kallanish.com/en/news/ For More Details