ANKARA: The Turkey region steel market is showing long-running stability in pricing trends related to rebar exports and billet and scrap imports, despite a recent surge in domestic rebar pricing, according to analysis using S&P Global Platts Turkey ARC indices. At the end of May, domestic prices for the reference construction steel surged outside typical premiums tracked over export prices. Platts domestic rebar prices excluding VAT were 15.44% above export prices, based on Platts data for May 26, well above an average premium for domestic prices of 2.5% seen over June 2016 through early April 2017.
In the local market, there was talk around expectations for Turkey’s government to finalize measures to increase overall availability in the Turkish rebar market, with cabinet approval sought to reduce customs duties on rebar imports. Domestic demand was expected to slow gradually due to Ramadan and rising availability and stocks. The higher domestic rebar prices, and import scrap and billet trends may signal more volatility around relative values for the commodities than comparisons with rebar export prices alone.
Rebar export prices have been in a tight range of $427.50-$437.50/mt FOB Turkey since early May. The implied melt margin using TSI scrap and Platts rebar export spot prices has strengthened over May from April, with the average in May at $157.62/mt, up from $153.69/mt in April. The export rebar-import scrap spread was assessed Wednesday at $159.50/mt, down from $162/mt day on day. For domestic rebar sales, the implied melt margin and that available for re-rollers, given the progressive rise in domestic rebar prices over the past weeks, would be even higher. Against this backdrop, import scrap prices have been stable since earlier in May.
