The Turkish wire rod market has this week been fairly quiet. While producers have been trying to increase their wire rod sales prices, for the time being end-users have yet to show any reaction. Although no change has been observed in dollar prices, TRY prices have shown some variation depending on the fluctuations seen in the $/TRY exchange rate. This week, end-users have still been behaving circumspectly as regards wire rod purchases and they have continued to purchase just the minimum quantities needed to deliver their orders. In addition, on the end-user side, there is anxiety that prices may show further decreases. With more competitive offers given for low carbon wire rod in the international markets, it is heard that some producers have started to focus their attention on high carbon wire rod and have commenced trial production.
It is also heard that activity in the export markets is slightly more brisk as compared to December. However, it should be taken into consideration that the ongoing contraction of demand observed in the international wire rod market is unlikely to change in the short term.
Egypt, Saudi Arabia, Romania, Yemen, Israel and Lebanon are the markets where Turkish producers have this week been active with regard to exports. Generally, large tonnages are not seen on the export side. In particular, it is heard that wire rod demand is at high levels in the Egyptian market. It is also observed that some Turkish producers' export offers to Egypt have been in the range of $490-500/mt CFR for February shipments.
This week, a negative mood has characterized the Italian wire rod market, which is one of the most important markets for wire rod. The price of mesh quality wire rod in Italy has declined to the level of €400/mt ($514/mt) for delivery to customer, excluding VAT, indicating a slight decreasing trend as compared to last week. In the local Italian market some producers have continued to apply capacity reductions and it is expected that certain producers will announce new price lists for wire rod within the month of February. Meanwhile, it is heard that in an another southern European country, Portugal, the prices of mesh quality wire rod have been at the level of €380-390/mt ($488-501/mt) for delivery to customer, excluding VAT.
A sluggish trend has continued to be observed in the Bulgarian market this week. In particular, as a result of the contraction experienced in the construction sector, demand difficulties are likely to continue for a while. On the other hand, a more optimistic atmosphere is observed in Romania, which is also one of the most important markets for mesh quality wire rod. In the local Romanian market, mesh quality wire rod is mildly above the level of €410/mt ($527/mt) ex-works, excluding VAT, while some Turkish mills have offered mesh quality wire rod to Romania in a price range of $480-490/mt FOB for February shipments, and for the same quality material Ukrainian mills' offers are standing at the level of €350-360/mt ($450-462/mt) DAF Romania.
To sum up, as we mentioned in our previous analyses, in order to satisfy the demand level, the necessity of producing high quality material has become a more central issue in the current period. In the upcoming days we will be better able to see whether there will be a recovery in the Turkish domestic wire rod market.