Turkish long steel producers have further reduced their prices in both export and domestic markets due to persistently sluggish demand.
Mills’ official export quotes for rebar on Thursday were mostly at $530-540/tonne fob Türkiye actual weight and at $535-550/t fob for mesh-quality wire rod, notes Kallanish. These values represent a further decline of $5/t from last week.
Demand has almost come to a halt in export markets, with only limited enquiries and for small volumes.
After Turkish mills shipped almost double the volume of their EU quota allocation for the third quarter, European demand remains weak amid excess supply and a summer slowdown.
Although there are some inquiries coming from the UK, Africa, Georgia, Palestine, Northern Cyprus and the Balkans, inquiry volumes are insignificant against Turkish producers’ production levels.
Market conditions remain highly challenging for Turkish long steel producers. While struggling to secure sales, mills continue to face high production costs. Scrap prices at around $345/t cfr Türkiye leave no margin, and imported billet has lost its appeal due to logistical disruptions in the Red Sea and rising billet prices.
With steel demand offering no support, mills are unable to increase prices. On the contrary, in order to convert limited inquiries into sales and secure cash flow, they are being forced to offer substantial discounts. As a result, some mills are heard offering rebar at as low as $525/t and wire rod at $530/t fob for relatively higher-volume inquiries.
In Türkiye’s domestic market, conditions are also challenging. With the need for cash mounting amid inaccessible and expensive credit, stockists and a few mills have decreased their prices below $520/t. Mills' official rebar offers stood at $525-540/t ex-works on Thursday.
Although there are hopes that a potential interest rate cut on 24 July could stimulate domestic demand, its impact is expected to be limited, as the underlying fundamentals are not strong enough to support a meaningful recovery. Meanwhile, if political unrest accelerates, rate cuts might be limited or not happen at all.
Source:Kallanish
