Turkish rebar producers have further decreased their long steel quotes amid weak demand and competitive prices in the global arena. However, even this does not seem to be helping a recovery in export sales.
On Thursday, Turkish mills’ export offers were mostly at $640-650/tonne fob Turkey actual weight, down from $650-665/t a week earlier. Offers for mesh-quality wire rod, meanwhile, were at $650-665/t fob.
While long steel prices continue to slump, the fall in scrap prices is slower. On Thursday, a US-origin HMS 1&2 80:20 is heard to have been booked at below $354/t cfr, although the seller refuses to provide confirmation. Although this booking also points to a decrease in scrap prices, rebar, which lost $30/t in two weeks, is falling faster.
Sales, however, remain weak as prices in the global market are well below Turkey’s levels. After losing an important market, Asia, Turkish mills are now under the threat of losing another major market - Israel. Middle Eastern producers, whose energy cost share is less than $5/t in total production costs, are ready to serve the Israeli market. On the other hand, weakening freight costs are helping Asian producers to sell in Turkey’s close major markets.
Besides regular Russian long steel sales at competitive prices in Israel, Middle Eastern producers are targeting even lower levels in the country. China is heard to have sold wire rods at $630/t cfr to Israel.
A Turkish mill tells Kallanish: "While Middle Eastern producers’ energy costs remain unchanged from pandemic levels, our energy costs have skyrocketed in one year. There is no way we can compete with them given current scrap and production costs."
Except for small-tonnage containerised sales in the close destinations, no significant rebar and wire rod export sales were heard this week.
A trader thinks Turkey has to decrease rebar prices to $580/t fob levels, although premium HMS 1&2 80:20 prices do not fall below $340/t cfr.
A Turkish mill says: "It is better to further decrease and keep capacity utilisation at a certain level that would meet domestic demand. Closure is more costly and painful."
Although being far from satisfactory, Turkish domestic rebar sales are doing relatively better compared to exports. Since the beginning of the week, almost 100,000t of rebar were sold in the domestic market. Mills’ offers in the domestic market are seen standing mostly at $640-650/t ex-works.
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