Turkish rebar export prices rebound on improved demand

Turkish producers have increased their rebar quotes in both domestic and export markets since last week due to improved demand and rebounded scrap prices. Quotes, at $690-710/tonne fob Turkey, however, are yet to return to mid-June levels.

On Thursday, Turkish mills’ export quotes were mostly at $640-660/t fob actual weight. Some mills, expecting to see even higher prices next week due to strong domestic demand, are seen keeping their sales closed until Monday. This points to a sharp rise as offers last Monday were at around $600-605/t fob.

A Turkish mill tells Kallanish: “Prices and demand are higher in the domestic market. Export markets are resisting the levels which are even below domestic prices. We will thus not rush to sell in export markets.”

Following a long downtrend and finally a rebound in prices, demand has recovered. A Turkish mill sold 50,000 tonnes of rebar to Hong Kong at $670/t cfr actual weight towards the end of last week. The same mill has sold this week a 10,000t top-up cargo to its previous sale to the US done in the last ten days.

Following initial bookings at $620/t fob earlier this week, 20,000t of rebar were sold to the EU at around $650/t fob actual weight. Although there are rumours of sales to Singapore at $650/t cfr theoretical weight, this is yet to be confirmed.

Yemeni buyers, who were waiting for prices to drop, are seen to have returned to the market. There have been sales to Yemen and Israel, both major destinations. There is also demand for Turkish rebar in Africa and South America.

Although Turkish mills are enjoying livelier demand this week, most market participants question whether market fundamentals are solid enough for activity to sustain.

A trader says: “This may be a small wave of [pent-up] demand which was on hold for a long time and may end after urgent needs are met. There are no such strong market conditions in the rest of the world. But as long as domestic remains strong, no price falls should be expected.”

Another trader says: “Turkish mills initially fuelled the market, citing the rise in scrap prices. In fact, other conditions, such as the rebound in China, the interruption in domestic supply due to alleged fraudulent billing, and sales to Asia have also supported prices. But unless there is an actual recovery in the global market, this may be short-lived.”

In Turkey’s domestic market, stockists’ demand remained very strong on Thursday. Although some mills opened sales at $640/t levels in the morning, prices increased to $685/t ex-works later. Most mills, preparing for higher prices on Friday, closed sales in the afternoon.

As for scrap, although there were numerous offers in the market earlier this week, almost all suppliers are seen to have backed off and are now targeting higher prices. Although no fresh deals were heard on Thursday, market participants think premium HMS 1&2 80:20 has already exceeded $350/t cfr Turkey. A UK-origin deal was reported done at $355/t cfr, but this is yet to be confirmed.