The Turkish wire rod market has continued in a state of anxiety this week, with a further softening of prices and a contraction of international demand observed. Although end-users have been purchasing only to satisfy their needs, due to the sluggishness seen in the finished steel market they have given inflexible counter bids and have tried to keep lead times as short as possible. Those mills which have been focusing their attention on producing widely demanded wire rod grades have a significant workload in terms of delivering orders, and so may deliver orders given for wire rods of special quality and sizes with long lead times. In addition, it is seen that number of inquiries with regard to finished steel has declined due to the crisis.
On the other hand, in the Turkish domestic market producers' offers for high carbon wire rod for spot purchases have this week been standing at levels of $530-550/mt ex-works, while import offers for the same grade wire rod have been at €360-380/mt ($492-519/mt) CFR Turkey. As regards import offers, payment deferral periods are quite long. At the current time, the main difficulty in the import market is the impossibility of foreseeing the direction of the market up to the time orders will be delivered.
Looking at export offers given from Turkey, offers to India for 5.5 mm drawing quality wire rod are heard at $450/mt CFR India. Also, it is reported that mesh grade wire rod offers given from Turkish mills to the export market are at $400-420/mt FOB. With regard to Turkey's export markets, the Middle East has continued to be more active than Europe.
Staying with the export market, in our last analysis we mentioned that the Saudi Arabian and Italian markets were ranked first and second respectively in terms of imports of Turkish wire rods, based on the Istanbul Mineral and Metals Exporters Association (IMMIB) data. This week we will take a glance at the Dutch market, which came third in the ranking in question. It is possible to speak of a similar situation in the local market in the Netherlands compared to that in the local market in Turkey. In the Dutch domestic market trading activities are at very low levels. Meanwhile, mesh quality wire rod prices in the Netherlands are standing at €300/mt ex-works, excluding VAT, but it is heard that offers are given below these levels for spot purchases. Also similar to the situation in the local Turkish market, inventories are at normal levels in the Dutch market while demand is on a slack trend.
In the Bulgarian market, mesh quality wire rod offers are hovering in the price range of BGN 590-605/mt ($410-420/mt), excluding VAT, stocks are at normal levels, while producers have been continuing to implement production cutbacks.
Meanwhile, in the Romanian domestic market, mesh quality wire rod prices are at the level of €300/mt ($410/mt) ex-works, excluding VAT, in parallel with the Dutch domestic market. On the other hand, it is heard that CIS origin mesh quality wire rods are being offered to this market in a price range of €300-320/mt ($410-437/mt) DAF Ukrainian border for March/April deliveries. It is expected in the market that prices will show further softenings in the short term. In the coming week we will wait with interest to see further developments as regards the direction of the international wire rod market.