Gradually increasing production costs are an obstacle to Turkish rebar producers selling to export destinations, Kallanish observes.

Despite the continuing rise in both scrap and energy costs, Turkish producers are being forced to give discounts on rebar sales as current price offers are found to be too high by global buyers.

Turkish mills’ official quotes for rebar were at $750-760/tonne fob Turkey actual weight on Thursday, up from $720-730/t fob a week ago.

A Turkish mill tells Kallanish: “Domestic rebar and billet demand has driven the market lately and prices have reached these levels. However, high prices coupled with expensive freight are preventing these levels from finding acceptance in export markets.”

Another producer says: “Export demand is lacking. We have concluded 200 tonnes of rebar export sales so far this week. Buyers are showing strong resistance to current offers.”

Limited export sales are being concluded at $740-750/t fob actual weight, depending on quantity and destination.

A trader observes: “Due to the strong domestic market, the rebar price increase was above the actual increase in scrap last week. Now they [rebar prices] have no room for a further increase despite rising scrap prices. On the contrary, we are experiencing declines.”

Domestic demand, which has driven prices, has also disappeared following the sharp depreciation of the lira on Thursday. Turkey’s Central Bank cut loan rates by 200 basis points on Thursday – a bigger cut than expected – to 16%, which is well below the inflation rate.

The lira weakened sharply against the dollar following the bank’s announcement and domestic demand for rebar has almost completely disappeared. Despite the increases on a TRY basis, local prices stood mostly unchanged at $740-753/t ex-works on Thursday. While the shortage of some rebar dimensions continues, the future trend of the domestic market is very unclear amid the economic instability seen in Turkey.

Scrap prices, meanwhile, saw a slight increase on Thursday on a booking concluded from Venezuela. A Turkish mill in the south has bought 25,000 tonnes of HMS 1&2 80:20 at $505/t cfr Turkey, for second-half-of-November shipment. A Baltic-origin HMS 1&2 80:20 booking was heard at $502/t cfr the previous day.

On Thursday, meanwhile, mills in western Turkey continued to increase their shipbreaking scrap buying prices to $475-477/t delivered, from $452-465/t the previous day.