As the current week draws to a close, Turkish wire producers appear to be attempting to increase their prices due to strong raw material costs.
On the demand side, some end-users in Turkey expect that their trading activity to Europe will be weaker during the holiday season; thus, they are waiting for the holiday season to buy wire rod. Some other end-users, on the other hand, say they are considering carrying out maintenance work during the holiday season in Europe, with which they do a lot of business.
Considering the holiday season in Europe and Ramadan in Turkey (starts in mid-August), end-users in Turkey are proceeding with caution as regards purchases of wire rod imports in general. In particular, on the import wire rod side from the CIS to Turkey, it is heard that some Russian producers may perform maintenance works in August (when the markets will be relatively sluggish), and it is also heard that some other producers are mentioning export offers for September.
Turkish producers have this week continued to turn their attention to the Far East. Since China is not effective in exports at the current time, Turkish producers are able to continue their export activity to the Far East. As mentioned in our previous reports, Turkish producers continue to maintain their interest in the US thanks to the positive news coming from this region.
Looking at the Turkish producers' current export wire rod offers, although it is heard that there are offers for mesh quality wire rods at $470-480/mt FOB, it is also heard that at least in the short term some producers are targeting levels of $500/mt FOB and above for drawing quality material. However, it seems that more time is required for these levels to be accepted on the demand side in the international markets.
With the southern European market going on holiday as of next week, it is widely thought in this region that price levels may increase in September and that a generally positive situation may be experienced after the holidays on the demand side.
Looking at the Italian market, the mesh quality wire rod price level is currently at €320-340/mt delivered to customer, while no improvement is seen in demand activity under the influence of the holiday drowsiness. On the export side, mesh quality wire rods are being offered at €325-335/mt FOB Italy for late August/early September, whereas it is heard that drawing quality wire rods are being offered for export under the same terms at €335-350/mt FOB Italy.
As August begins, with the slowdown in business activity in Europe and the Middle East due to the holidays and Ramadan, we will have to wait and see how the Turkish producers will take advantage of the price inquiries from Far East and possible demand from the US in the export markets in the coming weeks.