Having begun last week with price increases, the Turkish wire rod market has been moving on a stable trend during the current week - contrary to the general expectation. As mentioned in our last analysis, end-users, whose stocks are at quite low levels, are still undecided and so remain in wait-and-see mode. Other end-users, who have continued to purchase only to satisfy their need to maintain production, have this week continued to purchase at the current stable market price levels. Meanwhile, a few mills who have been producing at quite low levels continued this week to sell their materials to the local market rather than to the export markets, at prices slightly above the market levels.
Turkish export offers for mesh quality wire rod are this week in the range of $450-460/mt FOB. It is also reported in the market that Turkish wire rod offers to Syria are at the level of $470/mt CFR for April/May shipments; however, Syrian firms with high stock levels are moving with caution with regard to imports. Meanwhile, the Middle Eastern market has continued to be the main export market of Turkish producers.
Looking at the southern European wire rod market, positive signals have continued to come from Italy in particular. In the Italian market, mesh quality wire rod prices are at €320-330/mt ($422-435/mt) delivered to customer, excluding VAT, while drawing quality wire rod prices are at €340-350/mt ($448-462/mt) delivered to customer, excluding VAT. According to the producers' meeting held in Italy on April 1, it is expected that scrap prices may show a slight increase, which would impact on local market prices for wire rod. The coming week will give a better idea of developments in this regard. However, one issue should not be overlooked: demand has continued to be slack, though the general market atmosphere is quite positive. Also, Italian mills have continued to produce at reduced capacity utilization rates. As for Spain, drawing quality wire rod is at €350-360/mt ($462-475/mt) delivered to customer, excluding VAT, while weak demand has been weighing on the local market in this country.
As we mentioned in our last analysis, the Indian market continues to be a source of positive news. The number of inquiries to Turkish producers from this market - where market players have continued to seek reasonable offers for wire rod imports - have been increasing. In the Indian domestic market, drawing quality wire rod prices are at the level of $475-480/mt delivered to customer, including taxes, while ex-CIS offers for the same grade wire rod to this country are hovering in the range of $450-460/mt CFR for April/May shipments. With Chinese wire rod export offers at higher levels compared to the international markets, Turkey and other countries have a greater chance of maintaining their share of the Indian market. Also, rumors have been circulating in China concerning a possible withdrawal of the five percent export rebate for boron-added wire rod; however, no official announcement has yet been issued by the Chinese government. The Turkish mills are keeping a close eye on the decision-making process in China with regard to this topic.
Generally, although demand has continued to show a sluggish trend in the Turkish domestic market, clarification is awaited as to how the international markets will react to the increased export prices of the Turkish mills.