Turkey rebar: Export rebar downside becomes limited

Turkish rebar export prices rose today as overseas buyers and trading firms appeared to believe the market had reached its nadir.

Mills have been resistant to bids below $490/t fob actual weight for over a fortnight now, citing strong scrap pricing. And the expectation that the US may reduce import tariffs from 50pc to 25pc, coupled with the EU safeguard import quota potentially being full in the fourth quarter, led some to think the market was at least stabilising. Sentiment in southeast Asia and firm Chinese prices also filtered into a more bullish picture.

The Argus daily Turkish rebar assessment increased by $3.40/t to $494.50/t fob on an actual weight basis today.

A Turkish mill was confirmed to have sold 5,000t of rebar at $500/t fob Turkey on an actual weight basis yesterday to a UK buyer. Another buyer was heard to have purchased at $495/t fob Turkey on an actual weight basis, for 3,000t.

A large Turkish trading firm was confirmed to have restocked rebar and billet this morning, with rebar purchased at just shy of $500/t fob Turkey on an actual weight basis.

Some Turkish traders expect continental European demand for Turkish rebar to increase significantly in the next two weeks as they anticipate a rush of purchasing before the end of November as market participants look to sell into the EU import quota before it is filled up; once the quota is 90pc full, or at "critical levels", all material will be hit with the duty.

Traders and buyers with material arriving in the fourth quarter, if the quota is full, may keep it at ports or put it into bonded warehouses until the definitive measures are in place, to avoid the duty. Material can be stocked at port for 90 days without clearing customs.

Tight Chinese rebar supply, and the belief that prices may move up, has pushed some southeast Asian buyers to restock. As a result, one or two Turkey-origin deals are likely to be done into the region in the next week or so. A Marmara mill was confirmed still offering $520/t cfr Singapore on a theoretical weight basis for 50,000t.

On a further appreciation of the lira against the dollar, most Turkish mills decreased lira-denominated domestic rebar offers this morning. But the large Marmara mill offering to the Biga and Istanbul regions left its offer unchanged.

An Izmir mill was confirmed to have decreased its offer by TL70/t to TL3,350/t ex-works while an Iskenderun mill was confirmed to have decreased its offer by TL90/t to TL3340/t ex-works. Both prices include value-added tax (VAT). Prices are based on an exchange rate of TL5.69:$1, and these offers equated to $498.90/t and $497.40/t excluding VAT.

The lira was stronger as Argus went to press, hitting TL5.59:$1, meaning that it is likely that another price reduction will be implemented by Turkish mills tomorrow morning.

Marmara and Iskenderun stockists stated earlier this week that domestic demand will not strongly resurrect unless prices come much closer to TL3,000/t ex-works including VAT.