Turkey makes first rebar sale to Hong Kong in 2022

Turkish steel rebar was sold to Hong Kong for the first time in 2022 at the end of last week after three months of falling prices made Turkish product competitive into southeast Asia for the first time in many months.

A Marmara mill was heard to sell 50,000t of rebar at close to $670/t cfr Hong Kong on actual weight basis for end of September shipment. Two other Turkish mills confirmed a Turkey-Hong Kong freight rate for a cargo this size at $45/t, indicating $625/t fob on actual weight basis.

The mill was heard to have covered that sale through the purchase of US-origin HMS 1/2 90:10 at $335/t cfr Turkey on 24 June — higher than the most recent previous Turkish scrap import deal and in line with the most recent premium HMS 1/2 90:10 sale. Scrap exporters have eased back on aggressive offer activity in the past week, which has begun to at least temporarily balance supply-demand dynamics and put a halt to the scrap price downtrend. An Iskenderun mill was also heard to buy Netherlands-origin HMS 1/2 80:20 at $328/t cfr Turkey on 24 June.

Turkish export rebar prices have fallen by 54.3pc since 7 April, compared to a fall of 21pc in Chinese export rebar prices. Argus' daily fob Turkey steel rebar assessment fell from $980/t fob on actual weight basis on 7 April to $635/t fob on actual weight basis on 24 June. Argus' steel rebar fob Zhangjiagang assessment fell from $819/t fob on theoretical weight basis on 7 April to $677/t fob on theoretical weight basis today.

Turkish export rebar producers' ability to sell large amounts into southeast Asia has been challenged since 2019 by the emergence of fierce competition from the Middle East. Argus' steel rebar UAE ex-works assessment peaked this year at the equivalent of $844/t ex-works on 7 April but subsequently fell sharply over the following months. Regional steelmaker Emirates Steel reduced its rebar price on 24 June to the equivalent of $685/t for July deliveries. That indicates prices out of the UAE have only fallen by 23.2pc in the time that Turkish prices have fallen 56.8pc, allowing for Turkey to become more competitive into southeast Asia.

The fact that Turkey has sold steel into southeast Asia for the first time this year will create some market expectation that there can be higher demand for steel and scrap in the near term and also halt the drop in rebar prices, but there will need to be more supplies sold, and by several mills, in order for there to be any significant upward pressure on scrap demand and on prices.

A second Marmara mill's sale of rebar to domestic buyers this morning of 10,000t at the equivalent of $620/t ex-works excluding value-added tax (VAT) added to indications that there is at least some upward pressure being placed on the markets. It increased its offer level to $625/t ex-works excluding VAT in the afternoon.

By Alex Reynolds