Merchant bar prices in Turkey followed a fluctuating trend during last week (February 16-22). Prices that had declined to TRT 750/mt ($442/mt) excluding VAT in some regions in Turkey by the middle of last week gained some momentum with an increase of TRY 10-20/mt towards the end of the week. The fluctuation of the Turkish lira-US dollar exchange rate was the main reason behind the price changes in question. On the demand side, hard times continued to be experienced in the Turkish domestic market. Whereas, in consideration of the latest market situation, trading firms have hesitated over whether they need to increase their stock levels or not, a lot of companies in the Turkish market are currently trying to keep their stocks as low as possible given the instability of price levels.
We will now have a brief look at the Turkish merchant bar export data for January 2009 (in comparison with the January 2008 data), which have been announced by the General Secretariat of the Istanbul Mineral and Metals Exporters' Association (IMMIB). As mentioned in recent SteelOrbis reports, Turkey's merchant bar export market offers a more attractive perspective for Turkish producers compared to the local market. According to the IMMIB data, Iraq is the number one merchant bar buyer from Turkey with 21,000 mt in January 2009. Syria and Morocco follow Iraq with 12,000 mt and approximately 11,650 mt, respectively. Comparing the January 2009 figures with the January 2008 numbers in general, the conspicuous point is that the export tonnages to Iraq, Morocco, Syria, Belgium, Israel, Italy, Albania, Brazil and Yemen have increased, whereas the export tonnages to Romania, UK, UAE, Saudi Arabia, Greece and Algeria have decreased. Looking at Turkey's total merchant bar export tonnages, approximately 186,000 mt of merchant bars were exported in January 2008, whereas around 114,000 mt were exported in January 2009.
Meanwhile, the Turkish producers' merchant bar offers for exports have maintained their softening trend, decreasing to levels of $480-510/mt FOB Turkey, under the influence of the declining billet prices of the past week.
On the European side, the downtrend in scrap prices has been causing merchant bar prices to soften. While it is possible to hear various price levels for merchant bars across Europe, end-user demand is still at low levels in this region due to the hard times in the construction sector.
TRY 1 = US$1.69704