Posted on 23 Sep 2019
Turkish merchant bar producers are trying to maintain offers at last week’s levels amid tightened margins. However, competition between producers in a limited demand environment is forcing them to lower their prices.
Most Turkish producers’ offer levels still stand at $460-470/tonne for angles, $465-475/t for IPN-UPN sections, $470-485/t for flat bars and $470-480/t for IPE sections, all on an fob Turkey basis. However, some producers with favourable production costs and location advantage are observed to have decreased their offers to $455/t fob for angles.
A Turkish merchant bar producer tells Kallanish: “Merchant bars are kind of special products compared to rebar, so demand is a bit better. We are at least more comfortable with European quotas and thus focused on European demand.”
“The problem with merchant bars is that the order quantities are very small and dimensions are diversified,” he continues. “Our production costs are therefore much higher and we cannot be that flexible in our pricing. If the location is far from ports, the cost of billet purchases and product transportation becomes even higher. When one producer lowers its price, it kills all others. We have to be in a closer relationship and act together, but unfortunately we are in more competition.”
The latest sales consisting of a mixture of merchant bar products to a North African country were heard to be at $480/t cfr. Considering freight and financial costs – which are higher in the African market – the angle equivalent is below $450/t fob Turkey.
