The European merchant bar market had closed the previous week having registered many decreases. Against the background of further softenings in raw material and billet prices, merchant bar prices last week maintained their decreasing trend. Although offer levels are very low, there is no sign of recovery in end-user demand. Currently, an overall sluggishness dominates the construction sector on a worldwide basis. Faced with the effects of the global crisis, steelmakers have come to the conclusion that the best thing to do is to cut production.
Over the last week, in the Turkish merchant bar market prices have been revised downward due to the billet price issued by a domestic Turkish mill at the level of $373/mt + VAT. Though prices have decreased on US dollar basis, this drop has not much affected prices on a TRY basis. Last week, merchant bar prices for NPI-NPU profiles and angles stood at TRY 850-880/mt ($504-522/mt), while flat and square bars stood at TRY 850-890/mt ($504-528/mt), showing differences according to size, thickness and location; also, some mills can conclude deals at below these levels as they sell off inventories in stock. Meanwhile, it is heard that there was an offer at the level of TRY 810/mt ($481/mt) at the end of last week.
Last week, Turkish mills' merchant bar offer levels for the export market continued to soften. With the ex-CIS billet decreasing to the level of $270/mt FOB, finished steel prices have shown a further decline in the Turkish market. Also, it is heard that Turkish merchant bar producers have concluded bookings for small tonnages to Europe and North Africa. In the middle of the week, Turkish mills' offers to the export markets stood at $560-470/mt FOB for angles, for NPI and NPU they stood at $580-590/mt FOB, 80-100-120 mm IPE were in a range of $670-680/mt FOB, 80-100-120 IPE AA stood at $690-700/mt FOB, while flat bars stood at $570-580/mt FOB. The prices in question are on actual weight basis and for November shipments. However, both offers and concluded deals were heard below these levels.
On the other hand, the gloomy atmosphere has continued to be seen in the Spanish market. In Spain, many mills have reduced production. End-user's demand in the Spanish domestic market remains at very low levels. Spanish mills' offers stood at €670/mt ($831/mt) for 80mm NPI, for 100-160 mm NPI and 80-160mm NPU they stood at €660/mt ($819/mt), for 80mm IPE and 180-220mm IPE were €700/mt ($869/mt), 100-160mm IPE stood at €680/mt ($844/mt), while 100-180mm HEB stood at €710/mt ($881/mt) and 200-220mm HEB were €715/mt ($887/mt). The prices in question are delivery to customer. However, it is heard that there can be offers below these levels.
Meanwhile, the offer levels of the merchant bar producers in the Italian market have continued to soften. The prices have further decreased by €30-50/mt ($37-62/mt) compared to the levels seen in the 42nd week. Also, demand has continued to be slack. Last week in Italy's domestic merchant bar market mills' offers were heard at levels of €600-630/mt ($743-780/mt), excluding VAT, delivered to customer, on actual weight basis.
In the Portuguese market, prices continued their decreasing trend over the past week. During the week in question Portuguese mills' offers for small and medium sized sections stood at €550-560/mt ($681-693/mt) delivered to customer.
In addition, demand has retained the same sluggish trend in the Greek domestic market. Last week, merchant bar offers in the Greek domestic market were at levels of €540-550/mt ($669-681/mt) delivered to customer.
Prices in the UK domestic market have shown further decreases in the past week. Stockists' offers for small and medium sized merchant bars during the week in question were in the range of £530-540/mt ($815-830/mt) delivered to customer. The UK domestic market did not show any change with regard to the slackness seen in end-user demand.
With the effects of the global crisis felt increasingly with each passing day in sectors like construction, automotive, white goods, etc., the demand for iron and steel products from these sectors has started to decrease. One of the most important problems faced by companies in the iron and steel sector is the reluctance of banks to give credit. It is clear that the merchant bar markets have been affected by the abovementioned factors just like the other steel markets have.