Profile prices, which began to decline in November, were generally expected to continue their downward trend in December and become active with the New Year. One of the reasons for this expectation was the weakness of the
construction sector due to the approaching winter season. However, the situation seems to have changed with the advent of December.
The most recent difficulties of the Turkish producers are the shortage in
billet supply and the increase in
billet prices. Last week,
billet export prices declined after the Turkish mill Kardemir reduced its
billet prices to $435/mt and long prices indicated a downward trend. Although this situation has caused
billet prices to decline slightly in the domestic market, the rapid increase in
rebar prices and in
billet demand has led
billet prices to increase again. High
billet prices have caused export companies to maintain their prices. On the other hand, this has caused a constriction in the margins of companies concluding sales to the domestic market, which has seen a change from activity to stagnation this week. In the last few months, the demand for NPU and NPI increased due to the large quantities of them being exported. The domestic equal and flat bar prices were at $780-830/mt ex-warehouse, excluding VAT, depending on regions.
Export
merchant bar prices, which declined over the last two weeks, have rallied slightly due to the increase in the Euro / US Dollar exchange rate and in
billet prices. The export price of angle, which declined to $535/mt FOB, has increased to $545/mt FOB. Some producers are even asking for higher prices. One month ago, the offers for
Spain were at Euro 480-485/mt CFR. However, since the prices were higher for Spanish customers, the Turkish producers were not able to receive positive returns for these offers. Although the customers said that they would not conclude purchases until mid-January, they are expected to increase their purchases before the New Year due to the increase in the Euro / US Dollar exchange rate. This week, angle offers for
Spain were at Euro 475-490/mt CFR.
The demand from
Iran for Turkish profiles has increased over the last two months due to the increase in Iranian domestic demand and the strong situation of the Russian domestic market, which is
Iran's major supplier.
Iran is trying to close the demand gap, by making new
investments in its domestic market. For example,
Iran - one of
Spain's main IPE suppliers - is currently carrying out domestic sales.
Israel was not eager for offers at $575-585/mt CFR till last week. However, customers planning to conclude sales after January may bring forward their purchases on the back of the rallying in prices. Imported flat bar prices in
Israel are at $650-660/mt ex-warehouse, while imported angle prices are at $640-650/mt ex-warehouse.
The shortage in larger sizes of H-profile and other profiles is still on the agenda in
Europe. The prices of H-profile and IPE are increasing. Although demand for them is strong, supply is weak. The European producers have announced increases in their extras in the past month. The average increase for extras was Euro 20-25/mt. This week, Italian mill Stefana also increased its extras. The other southern mills are expected to follow this increase. The export sales of South Korean mill Hyundai Steel have increased to the Mediterranean market due to the supply shortage in
Europe.
Egypt and
Israel, which generally make their purchases from European producers, have also begun to purchase from South
Korea. This situation is reflected in the prices of the South Korean producers. A cargo of 5,000 tons has been sold to
Israel above $800/mt to be shipped in February. One month ago, the same cargo for February shipment was at around $700/mt. In addition, offers for
Egypt have also been increased. The shortage in European supply has increased the demand for South Korean-origin IPE and H-profiles, thus resulting in an increase in prices. In addition, Taiwanese origin materials, which have the same quality as South
Korea, are being offered at these levels. The major handicap of the Far Eastern producers is shipping the materials in large amounts.
The demand for larger sizes of profiles has increased in the Turkish domestic market in parallel with the development of the structural profile sector. In the Turkish domestic market, the demand for NPU and NPI, which are commonly used in structural profiles, has increased and is higher than that for angle. Therefore, there is a shortage in the supply of these materials in the domestic market. Turkish producers have also turned to the South Korean market due to the supply shortage of H-profiles and larger size profiles. Currently, a South Korean producer is offering H-profiles to
Turkey at Euro 730-740/mt for late February / early March shipments.
Although the demand for merchant bars is stagnant, it may rally slightly due to the increase in the Euro / US Dollar exchange rate. This situation largely depends on the reaction of
Europe, which is expected to enter the market with the New Year. The demand for H-profile and IPE is expected to maintain its strong level.