Turkey rebar: EU quota to be filled rapidly

Market: Metals
04/01/19

Market participants expect the proposed EU definitive safeguard Turkish rebar quota to be exhausted in a matter of days upon its introduction in early February, they said today after the European Commission (EC) made its plan public.

One Turkish mill has a total of 65,000t of rebar either to be shipped to Europe, en-route or waiting at port, which the producer had earmarked to clear customs once the new quotas come into effect. Another steelmaker was heard to have sold around 70,000t for February arrival.

Some 18,000-30,000t have arrived or are due to arrive in Romania in January and is expected to be cleared by customs in February, according to a market participant. Another continental European source said they expect the 117,231t allocated to Turkey for the period between 2 February and 1 July to be gone within a day.

The question remains when the residual global quota of 217,775t will be made available in the February-July period to exporters with allocated volumes. The EC declined to comment.

But some market participants anticipate a situation similar to what happened in the US post-Section 232 tariffs being implemented, with EU domestic rebar prices set to increase, while buyers continue importing and pay the duty.

The Argus daily rebar assessment fell by $2.50/t to $447.50/t today, as more mills were confirmed to be offering at $450-455/t fob, although market participants agreed $445/t fob would be possible for larger tonnages for some mills. A sale to Germany was heard to have been concluded recently, although details could not be obtained.

Turkish wire rod offers heard were $480-490/t fob.

In the domestic market demand picked up slightly yesterday, with one north Turkey-based mill selling just under 7,000t. Traders were planning to make more purchases today.

The seller offered rebar at 2,466 lira/t ($451/t) ex-works today excluding value-added tax (VAT) — unchanged since mid-December — but lowered its billet offer by TL60/t to TL2310/t on the same basis, although it did not sell much material.

An Iskenderun producer offered at TL2,880/t ex-works including VAT, and a trader said it purchased at TL2,860/t from two mills in the region.

A Marmara mill said it sold around 10,000t of rebar in the local market in the past two weeks at $445-450/t ex-works equivalent excluding VAT to reduce its inventory levels, and is now offering at $450/t ex-works.

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