This week the activity observed with regard to rebar exports has led some Turkish producers to focus their attention on rebar production. Meanwhile, difficulty has been observed in terms of supplying materials in Turkey's Marmara region in particular, due to the overhauling works conducted by some mills on their wire rod production lines. This difficulty on the supply side has caused problems for end-users seeking to deliver orders; on the other hand, it has led demand to show some slight recovery.
On the export side, some Turkish mills have continued to work for their local market instead of the export markets. Meanwhile, it is heard that a few Turkish mills have increased their wire rod offers for the Middle East to the range of $490-500/mt FOB from the levels of $450-460/mt FOB seen last week - in parallel with the price increases observed in rebar export offers. However, it should be considered that offers given to the other markets may show variation depending on local dynamics of the export market.
On the other hand, in Saudi Arabia, activity has continued to be seen on the demand side. In particular, the number of wire rod inquiries from this country to Turkey has increased significantly. Saudi Arabian mills are expected to announce their new price lists for their local market with the commencement of May. The general opinion is that prices may undergo changes, especially if iron ore prices show a considerable decrease depending on the outcome of the international annual iron ore contract talks. Otherwise, it is foreseen that local prices will maintain their current levels. In the local market in Saudi Arabia, the price of 5.5 mm mesh quality wire rod has remained unchanged at the level of $600/mt ex-works, excluding VAT. Meanwhile, it is expected that activity will continue to be seen on the demand side in the short term.
In the Dubai market, buyers have this week followed a wait-and-see policy. In this market mesh quality wire rod prices have been in the range of $470-490/mt ex-works, excluding VAT. The main problem in Dubai's domestic market is still the ongoing liquidity issue. It is said in the market that wire rod demand may show an improvement in the medium term.
As we look at the southern European market, in Italy - one of the most important wire rod markets in the region - a positive atmosphere has continued to be seen. Returning from the Easter holiday, some Italian mills will recommence production at the beginning of the coming week and price levels are expected to gain increased clarity during the week in question. Currently, it is mentioned in the Italian market that mesh quality wire rod prices are standing at the level of €330-340/mt delivered to customer, excluding VAT, while drawing quality wire rod prices are at €350-360/mt delivered to customer, excluding VAT.
It is heard that in the Algerian market, where trading activity has been quite strong recently, ex-Spain wire rod offers are in the range of €350-360/mt FOB. As for the overall southern European market, it is not yet possible to talk about hopes for a recovery in terms of demand.
This week, a major talking point has been whether demand from the Middle East will be sustained into the future. We will wait and see if Turkish mills manage to compensate for the inactivity in Europe through their business with the Middle Eastern market. In particular, it is expected that impact of the supply shortages caused by production cuts and by increased focus on exports will be felt most by Turkish end-users. Should the market continue its current trend, Turkish mills will not hesitate to raise their prices.