In this week's Turkish wire rod market end-users are expecting that wire rod sales prices may register a downtrend in the upcoming days in line with the softening in scrap and billet prices. For this reason, end-users are following a wait-and-see policy as regards new purchases. It can be said that this policy is also triggered by the fact that the domestic offers of some Turkish producers (those that do not want to cut their production capacities) have become quite competitive. Also, however, other producers, beside the abovementioned ones, are obliged to accommodate themselves to the competitive price levels, even if this does not suit their production and cost structures.
Meanwhile, market consumption of wire rod stocks is facing greater difficulties due to the lack of demand experienced in the local Turkish market, and in Turkey's export markets.
On the export side, Turkish wire rod producers need new sales strategies in the US (traditionally one of Turkey's main wire rod markets), as there have been ex-China boron-added wire rod offers at competitive prices to this market.
It is heard that this week Turkish producers have been offering mesh quality wire rod to the export markets at $470-480/mt FOB.
On the other hand, the situation in southern Europe this week does not appear to be so positive. In Italy in particular, some slowdown is observed in wire rod sales due to the downtrend in wire demand. The price range of mesh quality wire rod in Italy has this week been standing at €340-350/mt delivered to customer excluding VAT. In the southern European wire rod markets, demand remains soft and stocks are still at normal levels.
Looking at the markets in the Far East, it is felt that price inquiries to Turkey from this region have decreased somewhat due to increased impact of ex-China boron-added wire rod offers, especially after the recent natural disasters in the region. Deliveries of previously concluded deals from Turkey to this region, however, are mostly continuing.
North Africa seems to be stepping forward as a major market for Turkish wire rod exports at the moment. A significant increase has recently been observed in price inquiries from this region to Turkey. The principal factor behind this movement appears to be the favorable weather conditions in this region contrary to other markets, and which have had a positive influence on activity in construction and infrastructure.
In general, Turkish producers' order books for wire rod are fuller compared to their order books for rebars. In the coming days we will see whether the Turkish producers manage to find the new export markets they need.