Subdued Turkish rebar export demand dampens US optimism

Posted on 08 June 2018

Source: Kallanish

Turkish mills have booked two further US-origin scrap cargoes since the two concluded at the beginning of this week, with the latest taking prices up around $5/tonne. Despite the positivity surrounding the US, weak demand for Turkish rebar from other markets remains a concern, market participants tell Kallanish.

The latest cargo booked from the US was for 34,000 tonnes of HMS 1&2 80:20 at $347/tonne cfr Turkey and 8,000t shredded at $355/t for July shipment. The shredded scrap premium over HMS thus narrowed from the huge $15/t seen at the start of the week, but remained above its traditional $5/t. Besides the two US cargoes, a further two Baltic-origin consignments were booked with HMS 80:20 priced at $339/t and $341/t, broadly unchanged from earlier in the week.

Much fanfare was given to the 35,000t rebar cargo sold by one Turkish mill to the US this week following a long trade impasse. Most Turkish mills however have retained rebar export offers of $540-545/t fob Turkey. Some are quoting $550/t fob, while others say a price increase is imminent.

The underwhelming rebar price reaction to this week’s developments reflects the fact that demand for Turkish product on export markets remains weak. Moreover, some Turkish mills cannot count on the US as an export market and will therefore not enjoy any benefit from resumed US buying.

“I don’t think so,” says a Turkish trader when asked if mills will increase rebar prices. “There’s no market.” Another Turkish trader observes: “The US market is good, so scrap has gone up. But in the rebar market in general nothing has happened… Everyone is saying prices will increase, but who will buy?”

Demand in Turkey’s domestic market remains subdued by the impending general election and concerns over the country’s economy. Turkey’s central bank increased interest rates again on Thursday in order to curb rising inflation.

In the billet market, meanwhile, CIS mills are said to be offering at $505/t fob Black Sea, with the latest deals reported to have gone through at around $500/t. This is, however, down from $520+ a couple of weeks ago. 

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