The Turkish domestic market has been quiet this week, ahead of the general election this Sunday, June 12. After last week's sudden and steep wire rod price hikes, domestic wire rod prices in the country have shown some softening on Turkish lira basis, with the exchange rate of the US dollar regressing to 1.58 against the Turkish lira.
Following the wire rod price increases observed last week, final product (welded wire mesh, nail, wire) manufacturers who are facing difficulties in their own sales, prefer to delay their wire rod bookings in order to gain a clearer picture of the future price trend.
Following the rebound in the strength of the euro against the US dollar this week, with the exchange rate reaching 1.46, the competitiveness of ex-southern Europe wire rod offers has declined. This week, Spanish wire rod export offers stand at €530-535/mt ($775-782/mt) FOB. In the meantime, buyers in Algeria, one of the key export markets for the Spanish wire rod industry, are adopting a wait-and-see stance against Spanish offers which have reached €550-555/mt ($803-810/mt) CFR. However, SteelOrbis has learned from market sources that Spanish wire rod sales to the UK have lately livened up.
As regards ex-CIS wire rod offers, while low carbon wire rod offers from this region stand at $760-765/mt FOB for shipments in late July, Turkish buyers remain cautious towards these offers, considering the lead times involved, amid the uncertainty surrounding the Turkish domestic market.
With Turkish mills' wire rod export offers reaching $800/mt FOB last week, international trading companies and foreign buyers have started assessing offers from other countries. Among competitive offers, ex-China boron-added wire rod offers seem to stand out most. While Chinese offers to Dubai for boron-added wire rod stand at $760-770/mt CFR for late July shipments, the aggressive pricing policy of China has curbed the sales volumes of CIS producers in the Western and Central African markets.
Analyzing Turkey's wire rod export volume in May, it can be seen that Turkey's wire rod sales to African markets are still strengthening, as mentioned in our previous reports, while wire rod exports to Italy declined. Apart from this, sales to the US are still performing well. In the meantime, Syria is the only Middle Eastern country among Turkey's top 10 wire rod export markets. This underlines the impact of the political unrest in the region on trade.
Country | Volume (mt) | Change % | |
May 2010 | May 2011 | ||
Brazil | 1,204 | 16,338 | 1,256.87 |
5,750 | 13,820 | 140.35 | |
Tunisia | 2,200 | 10,150 | 361.36 |
16,545 | 9,050 | -45.30 | |
Nigeria | 0 | 6,050 | |
Canada | 0 | 5,800 | |
12,174 | 5,647 | -53.61 | |
Kenya | 565 | 5,537 | 879.17 |
Taiwan | 2,808 | 4,287 | 52.67 |
0 | 4,010 | ||
Other | 84,284 | 25,251 | -70.04 |
Total | 125,531 | 105,940 | -15.61 |
Source: Istanbul Mineral and Metals Exporters' Association (IMMIB)