Turkey’s long steel quotes continue to rise

Turkish mills have further increased their export quotes this week amid China's recovery, improved order books and production stoppages. 

Mills’ official rebar quotes on Thursday were mostly at $590-595/tonne fob Turkey actual weight, and at $595-605/t fob for mesh-quality wire rod, up $5/t from the low end of last week’s range, notes Kallanish.

However, export demand slowed this week as most buyers found Turkey’s price levels high, while there are still rebar offers available from Algeria and Egypt at $540-545/t fob.

Demand in the EU decreased significantly this week as buyers resisted Turkey’s higher prices. While the European steel market remains depressed, Egyptian offers in the region are heard standing at €515/t ($574) cfr. Turkish producers nevertheless improved their orderbooks after the eastern European sales earlier this month. 

A Marmara mill sold 5,000 tonnes of rebar to Yemen at $570/t fob theoretical weight, which corresponds to almost $595/t fob actual weight.

Another Marmara mill, which halted production earlier this month, sold around 8,000t of rebar to the Balkans at around $585/t fob. The same mill is heard to have sold containerised rebar to Ethiopia at above $590/t fob.

No sales have been heard in Central or South America this week.

Demand for Turkish rebar in Palestine continued, meanwhile. However, as the material is destined for Haifa port in Israel, some producers are avoiding selling there amid Turkey’s trade embargo, while others continue to sell regardless.

Northern Cyprus demand also continues amid a seasonal pickup.

The increase in Turkish rebar quotes is mostly the result of tight supply of certain dimensions in the domestic market, as Turkish mills prioritised export shipments. This is coupled with lower output due to maintenance at some producers in September, and the closure of a Marmara mill due to reported issues with radioactivity. Longer lead times and the Chinese market recovery following stimulus policy announcement have also contributed.

In the meantime, the decrease in scrap values and simultaneous increase in steel quotes, which is a rare case for Turkey, means Turkish mills are enjoying higher margins. Although scrap prices have recovered slightly this week, they are struggling to increase to suppliers’ target levels.

A scrap trader tells Kallanish: “Mills are now focused on the domestic market where they find better prices. However, I see the domestic market as an inflating balloon as there is no actual demand. Buyers are only meeting their urgent needs.”

On the other hand, China is a matter of controversy for Turkish market participants. Some believe the current recovery is not sustainable amid weak economic fundamentals, while others have a more positive outlook for post-Chinese National Day holiday activity.

In Turkey’s domestic rebar market, prices remained unchanged at $600-620/t ex-works on Thursday. However, demand, which has been driven by tight supply, is seen to have slowed already as buyers find prices too high.