The export demand for Turkish rebar is expected to remain slow during the first quarter of 2022, driven by strong competition amid protective safeguard measures in export markets like Europe and the US, sources said.
Driven by slow demand, rebar export prices also came under pressure amid high energy costs, a strong scrap market and depreciating Lira by the end of 2021. Turkish mills had tried to maintain elevated workable levels for possible rebar deals in the export market.
One European buyer expects prices to weaken further in the near term. “I foresee another decrease in prices in the upcoming weeks. The market is weak in general and [Turkish exporters] will need to fight for exports if they want to do business,” he said.
Demand outlook
Most sources are expecting a weak market during the first quarter. One Turkish trader anticipated a weak start to the Turkish rebar export market as the new year began, driven by low demand.
Another trading source indicated that demand for Turkish rebars in the export market might remain low in the near term as Turkish mills are facing strong competition in markets like the Far East and the Europe and the US, which have seen protective measures.
“We really need to see more upside in iron ore prices for Turkey to compete in Asia, now with Vietnam selling rebars to Singapore and Middle Eastern mills and being competitive as well,” the trading source told Platts.
“Buyers need to come into the market. There is very little competitiveness for Turkish rebar,” he said. “In the Europe and the US, there are barriers to enter that makes us uncompetitive like quotas and Section 232. And then there is competition from Algeria [in the US] as well. Otherwise, I think that the base price for Turkish rebars is quite competitive for these markets,” the source added.
Turkish mills’ rebar exports to the US fell to 226,200 mt over January to November 2021, from 386,400 mt over the same period in 2020, according to the Turkish Statistical Institute (TUIK) data released Dec. 31.
For countries like Romania and Albania in the Balkan region of Europe, TUIK data showed total shipments of approximately 110,709 mt to Romania over January-November in 2021, up around 45% from the same period in 2020, and exports totaling around 117,413 mt to Albania over the first 11-month period of 2021, an over 200% increase in sales over the same period in 2020.
EU safeguard quotas
The European Commission’s periodic review into its steel import safeguard measures has been brought forward to January from the expected February or March 2022. The review will also assess changes in the US Section 232 tariffs and its impact on steel trade flows. Market participants will have until Jan. 10 to submit their opinions on the matter.
“Turkish rebars should be at a price where we could put the quota costs in and be competitive, otherwise they will lose the market share,” one European trader said.
“I would suggest the rebar producers share the European quota among themselves according to a repartition key so they can maximize their sales. It has become a question of quota as normal competition cannot be observed in this European frame anymore,” the European trader added.
Amid the ongoing measures safeguarding against steel imports into the European Union, Turkish mills faced challenges with exports into Europe following the October-December 2021 quota period.
Sources said that Turkish mills had sold over 100,000 mt of rebar to Europe, exceeding its country-specific quota of 61,938 mt, with excess shipments stored at the ports awaiting clearance during the January-March quota period, hampering opportunities for future sales into the region till the existing shipments are cleared.
The January-March quota period opened Jan. 1 for Turkish-origin rebar imports into Europe. Approximately 58,173 mt of Turkish-origin rebar imports into the EU was awaiting allocation at around 6 pm London time on Jan. 3, while the total country specific quota stood at 60,591 mt.
Rebar exports
Turkish steel mills’ rebar exports during January-November 2021 rose 30% year on year to 6.88 million mt, according to the TUIK data. The revenue generated from those exports was 92% higher at $4.37 billion amid globally higher steel prices.
According to the data, Israel remained Turkey’s largest rebar export destination during the first 11 months of 2021 at 1.02 million mt, up 20% on the year, while shipments to Yemen saw little change at 856,400 mt.
Singapore became one of Turkey’s largest rebar export destinations by taking 644,800 mt, some 400,000 mt higher on the year, while shipments to Hong Kong totaled 427,500 mt.
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