The Turkish long steel supply chain on Wednesday saw rebar prices rise sharply after the key long product ended up weakest in relation to billet and scrap prices, and as it came up off a multi-year low.
An increase in the price of Turkish scrap imports helped weaken billet's position among relative strength indices for the three commodities, according to analysis using Platts Turkey ARC data.
Scrap's move may aid re-rolling margins for rebar producing mills the most, albeit from the context of higher-priced billet after a period of strong of gains in parallel with iron ore's recent recovery.
As iron ore prices have increased since the Lunar New Year, scrap's relative value to iron ore fell to 2.43:1 on Wednesday, from trending at higher levels previously, which may be providing some support for billet prices from Eastern Europe, Russia and China.
The tracked scrap to iron ore ratio uses benchmark Turkish delivered scrap prices and Platts IODEX 62% Fe fines, each adjusted for iron content.
The Platts Turkey ARC Scrap 30-day index was at 0.65%, strengthening from 0.3% on Tuesday, with scrap's ARC indexes seeing a run of positive figures since the middle of the month.
This showed strength compared with the 30-day relationships with billet and rebar for the first period since mid-January in what was a one month descent into relative weakness.
The Turkey ARC Rebar 30-day index was at minus 2.71% relative strength on Wednesday, increasing from minus 3.26% on Tuesday.
The Turkey ARC Billet 30-day index dropped to 1.8% on Wednesday from 2.7% on Tuesday.
The degree over and below zero marks each commodity's price deviation from the 30-day and 60-day average price relationship for the three product group, based on Turkey ARC analysis.
On a 60-day basis, the Turkey ARC indexes showed scrap at 0.65%, billet at 1.8% and rebar at minus 2.71%, with rebar now looking the weakest of the three over longer-term indicators as well.
The key rebar/scrap spread was still relatively weak at $140/mt Wednesday after improving from $137/mt Tuesday.
Rebar's margin over billet CFR Turkey basis was $54/mt, compared with $50/mt on Tuesday as conversion margins improved slightly for re-rollers on rebar's strength.
