The Turkish wire rod market has this week been characterized by anxiety. Against the background of end-users' concerns that prices may show further decreases, purchases aimed at replenishing stocks have been further delayed and end-users have been haggling to get low prices in the purchases they need to conclude in order to deliver their orders. Also, difficulties experienced by end-users in obtaining payments are likely to continue for a while.
With demand shrinking more obviously in southern Europe, it is observed that Turkish mills and end-users who do business predominantly with Europe are having difficulties in filling their order books. As a result of the improved performance in the local market in China - one of the most important competitors of Turkish mills in terms of exports, the Chinese impact on the export markets has decreased. Meanwhile, the 24.6 percent anti-dumping duty applied on all Chinese mills except Valin Group has given Turkey the upper hand in the southern European wire rod market. However, in every wire rod market where Turkish mills give export offers, it is possible to hear offers given from CIS countries that play an important role in the wire rod markets.
On the other hand, the Saudi Arabian wire rod market has still maintained its positive mood. Through mid-March the market is expected to perform better in Saudi Arabia, especially if the government supports the conclusion of current construction projects and if banks show greater readiness to issue credit.
In the Italian wire rod market, one of the national markets which dominates the southern European wire rod market, mesh quality wire rod is at the level of €370/mt ($476/mt) delivered to customer, excluding VAT, while drawing quality wire rod is standing at €380/mt ($489/mt) delivered to customer, excluding VAT, due to the softening seen in particular in scrap prices. It is unlikely that the grim outlook for the market will change in the short term.
This week, it is heard that mesh quality wire rod export offers given by a Turkish mill to Italy are standing in a price range of $470-475/mt CFR Italy for March shipment, while export offers given from Ukraine to this country for the same quality wire rod with the same payment terms are in the same price range as the Turkish offers. It is not a surprise that currently Chinese export offers are not active in Italy due to the abovementioned reasons.
It is heard that some Turkish mills have given wire rod export offers to a few countries in the same price range given to Italy, while some other Turkish mills have waited for greater clarity in the markets before giving export offers, in order to maintain their current export offer levels.
Moving to Poland, mesh quality wire rod prices are at the level of €350/mt ($450/mt) ex-works, excluding VAT, in the local market. It is heard that inventories are not at high levels in the Polish domestic market where demand is on a sluggish trend. Some producers have succeeded in maintaining last year's wire rod offer levels in spite of the effects of the crisis. However, the producers in question have difficulties in foreseeing the future market situation. It is reported that drawing quality wire rod export offers given from Ukraine last week stood in the range of $460-470/mt DAF Poland for February shipment. On the other hand, Russian origin drawing quality wire rod offers given to this country have stood at the level of €360-380/mt ($463-489/mt) DAF for the same delivery terms, while Russian origin mesh quality wire rod offers have been in a price range of €350-355/mt (450-457$/mt) DAF Poland. It is mentioned in the market that Polish market players have not been leaning towards import offers due to the instability seen in the €/$ exchange rate, and also as they cannot forecast the direction of the market in March.
As a result, unable to foresee the future direction of the markets, some end-users have behaved cautiously in terms of imports, while positive expectations about the future have predominated in the Saudi Arabian wire rod market. Approaching mid-February, we will be better able to see in the coming days whether the Turkish and European market players will manage to change the prevailing mood from negative to positive in their markets.