Highlights

  • Turkish mills raised local and export longs prices by US$5-10/t on 11 Nov, and a daily rebar FOB Turkey indicator rose 1.65%.
  • The 9 Nov explosion at Habas's Aliaga plant halted a 4.5 Mt/yr producer, prompting mills to pull offers and Izmir buyers to rush for stock.
  • Gains hold only if the outage drags on and buyers abroad accept them; watch the restart timeline, export deals above US$610/t and scrap below US$400/t.

A fatal explosion at one of Turkey's largest steelworks has given rebar mills the Supply scare they needed to push prices up into a soft winter market.

What happened

Turkish rebar mills raised both domestic and export prices by US$5-10/t on 11 November, mainly citing supply concerns. A daily rebar FOB Turkey indicator rose 1.65% on the day.

The move builds on a slow recovery. Export rebar sat at US$600/t FOB in late October, when Demand from the EU and East Africa was weak. By 6 November it was US$605/t FOB, unchanged on the week. Adding the latest rise implies offers of roughly US$610-615/t FOB, a figure computed from those two reports.

The Futures Market moved first. The rebar FOB Turkey benchmark behind the LME contract climbed from US$585/t on 22 October to US$600/t on 29 October and US$617.50/t on 5 November.

The turnaround is notable because the trend was down only two weeks ago. In late October a major Iskenderun mill cut domestic rebar to US$591/t ex-works, and weaker local prices dragged export offers lower.

At home, rebar held at US$610/t ex-works, with a leading mill selling at that level on two-week payment and at US$604/t for cash. Official wire rod prices also rose US$5-10/t on 11 November in most regions.

Why it happened

The trigger was the 9 November explosion at Habas's Aliaga plant in Izmir, which killed at least 17 workers and stopped production. Habas has about 4.5 Mt a year of steelmaking capacity at the site.

Its sudden absence changed behaviour overnight. Several Turkish mills withdrew offers and paused sales, re-rollers raised prices, and buyers in Izmir rushed to secure rebar. The outage "may last longer than 2-3 weeks", with any restart depending on the investigation.

Costs were already pushing in the same direction. Mills had bought December-shipment scrap at US$395-398.5/t CFR, and post-holiday restocking lifted domestic rebar by US$20/t to US$615/t in the week to 6 November. For mills working on thin margins, a supply scare was the obvious moment to reprice.

Regional competition eased slightly too. Egyptian producers raised local and export longs prices amid gas supply cuts, trimming a cheaper North African alternative that has often undercut Turkish offers.

How it plays out

The question is whether buyers abroad follow. Underlying demand is still soft, and weekly reviews caution that the rebar rebound may not last as winter approaches. Turkish mills are also stocking up on Chinese billet at US$515-517/t CFR, which caps their costs and limits how real the Scarcity is.

The winners are Turkish mills still operating, which can sell into a tighter Izmir market at better margins, along with re-rollers that have lifted prices. Traders holding Turkish bar bought before the blast also stand to gain. The losers are importers that rely on Turkish bar, who face higher offers just as their own construction demand slows into winter.

If the Habas outage stretches into December, the supply gap persists and export offers could keep their gains. A quick restart would probably see prices give back the premium, especially as the scrap market is already softening.

Next week, watch for an official restart timeline, whether export deals actually close at US$610/t FOB or above, and whether scrap slips below US$400/t CFR. Cheaper scrap would undercut the cost argument mills are using to justify higher rebar offers.