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Turkish rebar mills hold on to local market, avoid export

Global Steel & Raw Materials

June 1, 2017 - By Wojtek Laskowski

The strong local rebar market is allowing Turkish rebar producers to offset the much less attractive export price levels.

Following weeks of mostly domestic sales, Turkish mills are hoping the situation will continue in the week ending June 2, if not longer, allowing them to postpone the inevitable confrontation with the challenging export markets, sources told S&P Global Platts.

“Where is Turkey going to sell I have no idea right now,” a producer commented, adding that neither the US nor the UAE, two strategic destinations, are really interested in booking from Turkey.

The mill was unsure about the price direction on export. “It depends how much export we have to do,” it added.

Meanwhile, buyers indicated their target prices between $420-430/mt FOB, which was unacceptable for mills so far.

The Turkish mill quizzed by Platts said it was selling at $440-450/mt FOB Izmir but the volumes were negligible.

“Everybody is doing the same thing,” the company described the general trend.

It estimated that in May its export sales accounted for 10-20% of the total, small cargoes for prompt shipment.

Another producer said that, in spite of the Ramadan onset last weekend, the rebar market in Turkey seems to be going strong during the week ending June 2.

“After the referendum [in April] suddenly people started buying rebar like gold. Even we are surprised,” a producer commented on the local market activity this month. Looking at export, the mill saw little traction with buyers.

“The problem is July shipment as buyers don’t want to book it now,” it commented. “I don't know how local prices can stay this high,” a Turkish trader said.

Another trader believed the activity would come back to normal soon and mills would adjust their export prices eventually.

He already saw some downward corrections on the export side, with prices softening to $435-440/mt FOB.

A trader in Europe could book Turkish material at $430/mt FOB but he waited in expectation of the "bubble" in the Turkish local market bursting in the first or second week of June.

On May 31, Platts assessed its daily rebar price at $432.5/mt ($430-435) FOB Turkey, down $2.5/mt on day.

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