Turkey rebar: Mills maintain firm picture despite China

Turkish mills are set to maintain firm offers to domestic and overseas buyers despite Chinese sales volumes at the equivalent fob level of Turkish prices into southeast Asia this week.

The Argus daily fob Turkey rebar assessment remained unchanged at $429.10/t on an actual weight basis today.

Several Turkish mills said the Chinese rebar price decrease into southeast Asia is not sustainable and that once excess inventory has been exported, the Chinese domestic market will return to some sort of balance between supply and demand. Chinese exporters yesterday sold more than 100,000t of rebar to Hong Kong, Singapore and Myanmar at $415-420/t fob China on a theoretical weight basis and $430/t fob China on an actual weight basis. A 30,000t sale was also heard today at the equivalent of $428/t fob China on an actual weight basis. The southeast Asian purchases will lock Turkish mills out of that region for the foreseeable future.

Turkish mills over the course of last week successfully enticed their MENA rebar customers to increase bids to $425/t fob Turkey on an actual weight basis before the weaker Chinese news today. Some African importers today are questioning their bids/bid indications at $425/t fob Turkey, wondering whether there is a chance Turkish mills will have to react to another possible decrease in Chinese export rebar prices into southeast Asia later this week.

But the upward trend in Turkish prices this week looks sufficient to maintain most bids at $425/t fob Turkey. One major European trading firm serving African import markets with Turkish material said their customers want to remain away from Chinese material in case the coronavirus outbreak delays shipments. "Customers now want to cover themselves with non-Chinese material in this period of uncertainty and have waited for Turkish prices to bottom for some time," the trading firm said.

Turkish mills usually make sure their export rebar offers are a minimum of $20/t lower than Chinese export offers. Although this is usually to maintain the possibility of selling into southeast Asia, Turkish mills also keep this spread so as not to exert any downward sentiment on their MENA/western/eastern African customers.

Domestic rebar demand in Turkey remained strong today, and two Marmara mills announced they have closed local sales until 17 February, but there are also indications of a possibly weaker market next week. All increased demand since 7 February has come from stockists, and buyer demand remains weak. Stockists said their own demand will dissipate next week after the restocking period, as there will be a build-up of inventory by that time. "At the end of February, we will likely see lower local prices again," one major stockist said.

Any Marmara stockist wanting prompt material next week will likely have to buy from one mill. This is the only mill that will have promptly available material next week, stockists said. It has been offering higher than any other Turkish mill throughout this week.

The Argus weekly Turkish domestic steel rebar assessment increased by 130 Turkish lira/t to TL3,060/t ex-works, including value-added tax (VAT), equivalent to $428.10/t ex-works, excluding VAT.

A Marmara mill was confirmed to have offered 12-32mm-diameter domestic rebar at TL3,070/t ex-works, including VAT, equivalent to $429.60/t ex-works, excluding VAT.

An Izmir mill offered TL3,080/t ex-works, including VAT, equivalent to $430.90/t ex-works, excluding VAT.

A second Izmir mill offered TL3,060/t ex-works, including VAT, equivalent to $428.10/t ex-works, excluding VAT.

An Iskenderun mill was confirmed to have offered TL3,070/t ex-works, including VAT, equivalent to $429.60/t ex-works, excluding VAT.

A second Iskenderun mill was confirmed to have offered TL3,110/t ex-works, including VAT, equivalent to $435.20/t ex-works, excluding VAT.

All domestic rebar prices today are based on an exchange rate of TL6.06:$1.