End-user demand in the Middle East rebar market has shrugged off its slumber with the end of the Ramadan holidays. However, rebar price levels in the local markets have been weakening despite the lively end-user demand. High stock levels of producers and local traders may be considered to be the main reason behind this situation. Since user-demand is unable to catch up with supply, price levels have been softening on a daily basis in the Middle East market - a market which had bought large quantities of rebars in the first half of 2008.
In the UAE market, the Turkish origin rebar price levels have this week declined by AED 100/mt ($27/mt) compared to last week to a range of AED 3,000-3,100/mt ($817-844/mt), while Chinese origin rebars have been at price levels of AED 2,650-2,700/mt ($721-749/mt). The UAE, which had abstained from rebar purchases in the second half of July and throughout August and for most of September, has been purchasing rebars from Turkish producers since late September and early October at price levels of $680-750/mt CFR with small tonnages. It is heard that some of the offers to the UAE, which has continued to buy despite its high stock levels, have been made not to the local traders but directly to the construction companies. Offers at lower levels compared to those in the local market sometimes meet with acceptance. Due to the slackening export prices and the fifteen percent export duty, no offers from China to the UAE are being heard for the time being.
The softening trend in rebar prices has also been continuing in the local Turkish market. However, looking at the last three weeks, the trend in question is seen to be diminishing in strength. This week, rebar prices in the local Turkish market have been in a price range of TRY 1,000-1,050/mt including VAT ($616-627/mt, excluding VAT). While local producers' stocks cannot be considered to be low, local traders have been keeping their stocks at minimum levels and are not anxious to increase them. The Turkish rebar producers have been offering rebars to their export markets, not including the US and the Persian Gulf, at price levels of $580-650/mt FOB. However, they have been offering at higher price levels to some regions if the purchased tonnage is low. Freight rates have been softening since there is now greater ship availability due to the lack of deals. In this context, the Turkish producers have been taking advantage of China's weak export situation and have been offering to China's neighboring regions. It is heard that some deals have resulted from these offers, though not many.
The price levels of rebar offers from the CIS have also been decreasing due to the globally softening prices and the rising competition. CIS origin rebars have this week been offered for export in the price range of $560-600/mt FOB Black Sea ports.