Turkish steelmakers have confirmed to the government they are able to provide the required steel supply for the reconstruction of earthquake-hit cities. This will be done at prices valid on 1 February, but with the addition of a surcharge to reflect increased input costs and less favourable exchange rates, Kallanish notes.

Rebar was at around $710/tonne ex-works on 1 February, but scrap prices have since increased by over $30/t. Turkish mills will meet with the Turkish Mass Housing Development Administration (TOKI) on 7 March to discuss further details.

Once reconstruction begins, it will likely drive the domestic rebar market for a long period. Reconstruction is expected to take place not only in cities hit by the 6 February earthquake, but also other areas threatened by earthquakes.

Turkish producers increased their rebar quotes further last week, but activity slowed in the domestic market while exports came to a halt (see separate story). Turkish suppliers have been usurped by other origins in various traditional markets, and are worried they will be unable to regain this business.

Turkish steel capacity utilisation rate fell to 56.6% in January, with exports falling 42% to 733,000 tonnes.