In its quest to continue increasing prices of long products, which began in December, Turkish steel company failed. After passing through the highest point of ascent in mid-January, the quotations for rebar slid down. The majority of consumers in the countries of the region have a wait and see policy, hoping for further concessions. Scrap prices in Turkey in recent times is also slowly reduced, so steelmakers are less high costs. Finally, to reduce the cost of steel products contributes to the weakening of the Turkish Lira against the dollar.
If in the middle of January, the Turkish company offered to export rebar at $620 per ton FOB and more, at the end of the month the price has dropped to $600-610 / t FOB. In the domestic market also declined by $5-10 per ton, up about $600-620 per ton EXW. Due to the cold snap the demand for structural steel in Turkey in recent times has decreased, while new orders from abroad does not arrive.
A serious problem for Turkish companies have restrictions on the supply of their products in some countries in the region. Due to the introduction at the beginning of December in import duties in Egypt, sales of Turkish rebar in the country stopped. The UAE began more often to apply to Turkish products 5% rate. As a result, the cost of local and Qatari rebar in the local market increased to about $640 per ton EXW/CPT, and Turkish companies are opposing orders at the rate of $590-600 / t FOB.
Not a special demand in the region long products from the CIS. The Iraqi company, and we purchased a fairly large amount of Ukrainian and Turkish rebar in the first half of January, decreased the activity. Currently, export quotations of Ukrainian material does not exceed $575-585 / t FOB and only for deliveries to African countries could reach $590 per ton FOB. However, Turkish companies can rely on favorable conditions in the countries of black Africa. Ukrainian production of wire rod sold in Israel for about $600 per MT FOB, but for deliveries to European countries the price to $610-615 / t DAP.
Metallurgical companies remains only to hope that the current downturn is temporary. The reasons for this, in principle, is. This year in Iraq and Saudi Arabia will be implemented by large construction projects. Currently, consumers took a pause to wait for concessions from suppliers, but in early February, they are expected to resume purchases. According to Trade Arabia News Service, in 2012, consumption of steel products in the Middle East increased by 5.7%, following a 2% contraction a year earlier, while the figures for the current year will be at least not worse than last year. However, the commissioning of new capacities in Saudi Arabia and the resumption of some production lines in the UAE may restrict requirements to imported products.
Impact on the cost of long products in the region will provide the scrap metal market. Now the price of this material is heading South, but in February they, obviously, can again be strengthened by the return of buyers to the market.
 
Victor Tarnavsky
Rusmet.ru