Having halted their scrap purchases at the start of Ramadan, Turkish mills have restarted their purchases as of last week. Nevertheless, concluded bookings have been below August price levels. This decline in scrap prices could signal a future decrease in semi-finished and finished steel prices, instead of the increase which had been expected. Under these circumstances, there are different opinions about the possible directions of the rebar markets with the conclusion of Ramadan. Some market players expect an increase both in price and demand levels after Ramadan, while others think that the softening seen in scrap prices may have an impact on finished steel prices.
Approaching the end of Ramadan, it was thought in the Turkish domestic and export markets that rebar prices could increase; however, currently it is seen that this expectation has not been fulfilled. Nevertheless, both in the Turkish domestic and international rebar markets, Turkish mills' rebar offers have not shown any significant decline as compared to last week. This week, Turkish mills' rebar export offers are at $480-490/mt FOB, whereas this price range was $480-500/mt FOB last week.
In the Turkish domestic market rebar prices are standing at around the level of $485/mt ex-works, excluding 18 percent VAT. The increased strength of the Turkish lira against the dollar has led prices on a dollar basis to maintain their high levels.
Meanwhile, it is heard that boron-added Chinese materials are being offered to China's neighboring countries, especially due to the decreased price levels in the Chinese domestic rebar market. As is known, Chinese exporters, who face a 15 percent export duty for long products, are exempted from duty for exports of boron-added materials and also benefit from government support. However, having been on a decreasing trend for weeks, Chinese origin rebar prices have this week registered a slight slowdown in their declining trend.
In the Middle Eastern market, purchasing activities are slow due to Ramadan. However, in Saudi Arabia it is heard that traders have increased their purchases as of last week and that they have hopes for a recovery in demand after Ramadan. In the UAE market, importers have shown increased demand for Turkish origin rebar; nevertheless, high tonnage bookings have not been concluded very frequently. In this market, it is expected that trading activity will show improvements after Ramadan.
Looking to southern Europe, it is seen that the gain in strength of the euro against the dollar has been reflected in producers' export offers. Offers given from southern Europe have shown some softening. Generally, the last rebar bookings concluded from southern Europe for export are standing in the range of €360-370/mt FOB, varying according to country of origin. The principal export markets for southern European producers have continued to be the Mediterranean region and North Africa. Meanwhile, the softening seen in the export markets have not been observed in the local markets of southern Europe. This week prices have remained unchanged in the southern European domestic markets in general.
Although rebar prices have continued to rise in the German and UK markets, bookings have been concluding at lower levels. Also, no change has been observed in Bulgaria and Romania this week. Generally, the European markets have indicated little change in recent weeks. Following the holiday, producers increased their rebar prices, considering the uptick in scrap costs. On the demand side, increased demand has been coming from stockists and distributors rather than from end-users.
On the other hand, the recent softening seen in the global scrap markets and the halting of scrap purchases from China are being followed closely in Europe. The consequences of these issues will be observed in the coming period.