The Middle East market’s agony seems to be taking endless connotations. Much hype had been created about an imminent revival after the Ramadan. However the tendencies during the last week show lack of even a semblance of enthusiasm.
Although local mills made preparatory moves by hiking rebar prices by AED 100 per tonne it seems an exercise in capitalization of the buyers preference for local mills vis a vis import.
In the mellowed market sentiments buyers opt for sourcing from local manufacturers owing to shorter and customized delivery terms when the import offers inch up being nearly at par with domestic levels.
The demand fundamentals ever sagging any buying activity will be an exercise in stock replenishment yet again. The current offers of rebar from Turkey at USD 620 per tonne to USD 630 per tonne CFR Dubai is evincing no interest. In fact the local rerollers are starkly facing closure with billet and rebar prices almost at par.
The only silver lining has been resurgence in demand form Iran due to shortages in the local market and booming domestic demand. Turkish mill have booked imported 200,000 tonnes of billets and 50,000 tonnes of rebars during last week. This is astonishing by any yardstick when viewed in the backdrop of average monthly export of 500,000 tonnes of billets and average monthly import of 35000 tonnes of rebars in Iran.
However just when market mandarins were pinning aspirations on revival it seems the bubble has been punctured with the scrap and billet prices relapsing by nearly USD 15 per tonne to USD 20 per tonne and USD 50 per tonne respectively. There are firm indications that billet manufacturers have been unable to hold to over bloated levels of USD 570 per tonne to USD 580 per tonne with empty order books. Scrap levels too have bulked over the week crumbling under its own weight as abject downstream demand could not digest such towering levels.
The scenario looks all the more gory with traders holding on to position cargoes likely to up the ante playing a perfect spoiler. Hence this will certainly prompt the buyers to undergo withdrawal symptoms expectant of further fall in prices thereby nipping in the bud any buying revival.
The coming week will be epoch making about the pre winter market meanderings with stage set for untimely downpour in autumn.
The Middle East Long Product Price Index MLPPI surged by 22 points last week whereas the Middle East Flat Products Index MFPPI also increased by 53 points. The overall price index Middle East MEASPI went up by 31 points.