Surging prices for long steel products in the Mediterranean region prompted northern African producers to seek further increases.
Earlier this week, Egyptian mills hiked rebar offers to $695-700/t (12,450-12,550 Egyptian pounds/t) ex-works, with a leading direct-reduced iron (DRI)-based mill offering at $706/t (E£12,650/t) ex-works at the current exchange rate, excluding 14pc value-added tax (VAT).
The upward global trend was the main driver, and most trading firms were restocking, anticipating prices to move up further, an Egyptian source said. Demand improved primarily from stockists, but it is still not as good as last year, another market participant said. However, because the construction ban was relaxed in November, rebar consumption in Egypt has increased by 44.1pc on October, to 689,000t, but it was still 14.8pc lower than a year earlier.
In Algeria, there were no official rebar offers, with the most recent indications at 80,000 dinar/t ex-works available for some customers, which is $557/t at the current exchange rate, excluding 9pc VAT. New prices in Algeria will be announced by the end of this week, but they will be much higher, an Algerian market participant said. But while demand for wire rod was strong locally and in export markets, construction demand did not provide sufficient support to rebar prices, which were driven mostly by rising production costs. There is concern that a rise in local rebar prices will push buyers to import, an Algerian source said. Italian rebar offers rose to €510-530/t ex-works this week, but sellers were not offering to export markets amid the bullish sentiment.
Offers for Tunisian rebar were heard at a maximum of $560/t ex-works, excluding 19pc VAT. But billet customers, which restocked in recent weeks, still preferred to observe the market, as they were awaiting confirmation from the government's price review.
Some offers for CIS billet were reported at $580-600/t fob today, but market players estimated tradeable values at no higher than $570/t fob for base quality, which could be acceptable primarily by wire rod producers in Turkey. But north African buyers could not afford to buy semis at these levels, as long product prices were climbing at a slower pace. The Argus daily Black Sea billet assessment rose by $5/t today to $565/t fob.
But one Algerian longs producer was heard to be planning to offer limited volumes of billet locally and to overseas customers, as a result of bullish CIS and Turkish billet prices. Market participants have also reported that since last week, the mill had issues with supply delays of raw materials.
An Egyptian seller stepped back from the export market in anticipation of higher prices, having sold about 25,000t of wire rod for January shipment to overseas buyers a few weeks ago. Some deals were reported at $630/t fob for drawing-quality material. An Algerian producer was in no rush to sell mesh-quality wire rod, which was available for March shipment, with the most recent bookings reported to south Europe.
