The European market has been calm in recent months due to the instability in the end-user demand level. The local rebar markets of the exporter countries in Europe have not been experiencing a fast increase; some weeks they have been stable, while other weeks they have been trending in an upward direction. In the 25th week of the year, the producers in Italy increased their base prices to €620-630/mt ($976-991/mt), and it seemed as if they would push for the price level of €640/mt ($1,007/mt). Meanwhile, local rebar prices were at a level of €830/mt ($1,306/mt) in the week in question. However, in the 26th week of the year, the rebar prices in Italy, which has long been experiencing difficulties in terms of end-user demand, have dropped to €800/mt due to the rumors about a possible scrap decrease in Europe and the lack of interest in new export offers in the target markets. In the meantime, rebar base prices have declined to a range of €590-600/mt ($929-944/mt). The Italian rebar export prices were at €815/mt ($1,282/mt) in the 25th week of the year and, in spite of the softening in the local market, the price level in question has this week remained unchanged. With recent developments, the rebar export prices in this market have been €10/mt higher than the local prices, while they were previously €15-20/mt lower than the local prices.
No improvement has been observed in the end-user rebar demand level in Spain. With no sign of activity in this market seen coming towards mid-summer, market players in Spain (which takes a long holiday in August just like the Italian market) have become somewhat uneasy. A clearer picture of the market situation may be seen in September.
Demand in the Middle East is still active. Saudi Arabia's recent decision to encourage imports due to the fact that domestic production has not been meeting local demand, just like in the UAE, and the fact that Bahrain and Kuwait have turned to other countries (other than Saudi Arabia) for rebar supplies, these factors constitute very good news for Turkish rebar exporters. It is already heard that Bahrain has made purchase inquiries for large tonnages.
Since Bahrain, like Dubai, is particular about buying import material which has CARES certification, Bahrain may purchase from the biggest rebar supplier in the region, i.e. Turkey, or from an even closer source, i.e. Dubai. Since Dubai has also been purchasing rebar from Turkey, Bahrain buyers may buy directly from Turkey with better prices compared to Dubai. However, Bahrain buyers may have serious difficulties if they take this course of action as the Turkish producers have announced that they have almost filled their order books for September.
The rebar prices in Dubai, which were at AED 5,400-5,600/mt ($1,470-1,525/mt) in the 25th week and in the early days of the 26th week, have increased to AED 5,770/mt ($1,571/mt) delivered to site on a theoretical weight basis for three to four-month deferred payment, excluding VAT. In line with this increase, it is thought that Turkish rebar producers may increase their new offers compared to the recent deals concluded at the price level of $1,470/mt CFR. It is expected that the new rebar offers of these producers will be above $1,500/mt CFR Dubai. Given that the Dubai buyers have still been asking for material for August shipment even though the Turkish producers have announced that they are booked out for September shipments, it is obvious that the demand in Dubai very strong.
Thanks to the active local demand, the price level of 12 mm rebar in the local Saudi Arabian market is at SAR 5,000/mt ($1,333/mt), while 8 mm rebar is at SAR 5,440/mt ($1,450/mt), delivered to customer on theoretical weight basis, including five percent VAT. It is heard that there have been some export deals from Turkey and China to Saudi Arabia after this country's announcement made last week regarding imports. Considering that the Chinese producers have still been performing exports (concluding deals at lower prices compared to the Turkish ones) in spite of their strong domestic demand, the recent earthquake and the export duties, market players have been wondering whether the Chinese government will again move to increase export duties. Also, the recent iron ore agreement concluded by Baosteel may help to push up the Chinese prices slightly.
The rebar price in Bulgaria has been slightly higher than in Italy and Spain due to more active end-user demand. The rebar price in Bulgaria's domestic market is at €860/mt ($1,353/mt) coming towards the end of the 26th week.
With regard to the local Turkish rebar market, prices have slightly decreased in this market due to a number of factors: namely, the low demand level, stable scrap prices, the lack of any considerable increase in local and foreign billet prices, the delay in determining the new export offers and the decrease in the TRY/US$ exchange rate. It is expected that the Turkish producers - whose prices in their local market have fallen short of expectations due to foreign market development - will base their strategy for the coming period on developments in Dubai.