Southern European and Turkish wire rod markets maintain their calmness

Friday, 06 February 2009 12:01:06 (GMT+3)   |  
       

Silence has predominated the Turkish wire rod market this week. Gloomy atmosphere on the demand side has been felt more than last week. The most important problem with regard to demand has been experienced while obtaining payments. End-users who have to deal with payment collection difficulties have gradually started to cut their production capacities.

On the other hand, the most important difficulty observed on the producers' side is the contracted end-user demand in line with the international wire rod markets, despite the production cut-backs and shift system applied in the mills. Unless a recovery is observed in demand for finished steel which use wire rod as a raw material, it is unlikely to hope an increase will be seen in wire rod demand for the time being. In order to ease the affects of contracted demand in the market, it is heard that some Turkish wire rod market players have recently started to do business in the markets where they did not have an active role before, i.e. Iraq.

Under the current circumstances, more trading activities have been observed in the Middle Eastern market as compared to southern European market in terms of exports. This week, in line with the last week, prominent export markets of the Middle Eastern market are: Saudi Arabia, Israel, Lebanon, Algeria and Egypt.

This week, positive mood has continued in the Saudi Arabian market. It is reported that mesh quality wire rod offers have been standing at the level of $590-600/mt ex-mill, excluding VAT, in the domestic Saudi Arabian market. Also, as for imports to this region, it is heard that CIS countries have been offering wire rod as well as Turkey. Some Turkish wire rod producers' offer levels for the bookings concluded before have been at the level of $550/mt CFR Dammam for February shipments; however, this week some Turkish mills have offered mesh quality wire rod in a price range of $520-530/mt CFR Dammam. Meanwhile, export offers given from Ukraine to Saudi Arabia have been standing at the level of $540-550/mt CFR Dammam for February shipment.

Looking at the southern European market, it is seen that the market has still maintained its calmness this week. Prices have been on a decreasing trend as is seen in the price list reported by Brescia Chamber of Commerce in Italy. This week, mesh quality wire rod has decreased to the range of €370-380/mt ($472-485/mt) delivered to customer, excluding VAT. In addition, it spoken in the market that, export offers given from Spain for mesh quality wire rod have this week stood at the level of €370-380/mt ($472-485/mt) FOB Spain.

It is not foreseen that a recovery will be observed in the southern European market, even if in the overall European market for the short-term. End-user demand which shows a gloomy outlook this week has also supported this forecast.

With regards to Turkish producers, this week it is seen that some Turkish mills have announced their export offer levels for mesh quality wire rod at the level of $480/mt FOB Turkey or slightly below this level, while certain Turkish mills have tried to keep their export offers for the same quality wire rod at the level of $500/mt FOB. Certainly, high tonnage wire rod sales anticipated on the export side are unlikely to be concluded for now.


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