In the Turkish domestic wire rod market demand remains quiet. Last week some Turkish mills had closed their wire rod domestic sales. In the current week these producers have opened their wire rod sales again, reducing their prices significantly. This has led buyers to delay their bookings for the time being, as they anticipate that prices will drop further. Last week, wire rod prices in the Turkish domestic market were at $774-805/mt + VAT ex-works. However, this week prices have declined to $753-810/mt + VAT ex-works. Buyers who have postponed their bookings have been maintaining their inventory levels, while other buyers, who have to supply final product orders, have continued to conclude new bookings. In the meantime, since producers are still trying to keep their mesh quality wire rod prices at as high as $800-810/mt ex-works in Turkey's southern region, buyers are now assessing alternative supply sources from other regions. As we already mentioned in our previous reports, the Turkish wire rod market can be still defined as a buyer's market, while it is reported that suppliers may reduce prices in actual transactions for high volume wire rod bookings.
A major steel producer in Turkey's Iskenderun region has completed its short-term maintenance works and resumed wire rod production this week.
The weakening of the euro against the US dollar, with the exchange rate hitting 1.43-1.44, has intensified European wire rod producers' focus on the export markets. Offers given from Italy to Slovakia for drawing quality wire rod at €555-565/mt (794-808$/mt) DAF can be seen as a sign of European producers' commitment to exports.
On the other hand, Turkish buyers are currently not showing interest in wire rod import offers, due to the competitive price policy observed in the domestic market. Lead times, freight costs and anticipation of a further price softening in Turkey and a possible slowdown in the Middle East during August due to Ramadan also contributes to this decision of buyers.
As regards Turkey's wire rod exports, with an aggressive export policy China has entered into strong competition with the Turkish mills in the Far Eastern and Middle Eastern markets. Reflecting the quiet Turkish domestic wire rod market, Turkish mills have reduced their export offers by $20-25/mt as compared to last week to $740-750/mt FOB. However, market insiders state that, in order to compete with ex-China boron added wire rod export offers in the Middle East, India and Far East, Turkish suppliers should give offers below this price range.