This week, the Turkish mills continued their struggle to increase price levels in their local wire rod market. The mid-week revisions and recently announced changes to producers' price lists have caused difficulties for the cost estimations of end-users who use wire rod as raw material. Meanwhile, the late announcements of their wire rod sales prices by some mills have made it hard for end-users to determine prices for their orders. In addition, the end-users who are trying to reflect cost increases on to their finished product prices are having problems in breaking down the resistance of foreign buyers.
Furthermore, end-users with low stocks who need to buy in new materials immediately have begun to purchase materials this week under the pressure of likely further increases in prices. On the other hand, end-users with higher stock levels continue to deliver their orders from current stocks. At present, ex-CIS mesh quality wire rod offers to Turkey are heard to be standing at levels of $500-510/mt CFR Turkey for December shipments; some end-users in Turkey are interested in buying at these prices, which seem quite reasonable compared to the current domestic market levels.
This week, the Turkish mills have started to reflect the price increases seen in the local market on to their export offers. Their export offers for drawing quality wire rod are in the range of $570-600/mt FOB for December shipments, showing a significant rise as compared to last week. Also, it is heard that some mills have decided to give export offers for wire rod even above these levels. In the coming days, we will be better able to see how international market players respond to these offers, which may be considered to be at high levels in the current market conditions.
Meanwhile, it is heard that the Italian domestic scrap market has hit the bottom during the current week. In addition, it is expected that Italian producers' wire rod offers for mesh quality at the levels of €370-380/mt ($470-483/mt) delivered to customer, excluding VAT, will be revised again under the current conditions either this weekend or at least next Monday. The overall view is that an upward trend is likely to be seen; however, it is impossible to pronounce a definite rate of increase. Demand is on a slack trend as market players have remained in "wait and see" mode over the current week.
As for the Polish domestic market, it is heard that the mills have been offering mesh quality wire rod at the level of €400-420/mt ($508-533/mt), excluding VAT. Demand is at low levels in this market, with the stocks of local end-users also low.
With regard to the Bulgarian domestic market, this week wire rod prices have shown an increase due to the Turkish mills' rising export offers, reaching the level of BGN 900/mt ($584/mt). Also, it is heard that domestic prices are likely to show a further increase under the influence of the Turkish market.
In addition, it is heard that pessimism has this week prevailed in Dubai's wire rod market. The main factors behind this pessimism are the recently observed liquidity shortages and the probability that some projects which had been due to start in January may be delayed. In this market traders are offering mesh quality wire rod to end-users in the range of $580-590/mt ex-warehouse, including VAT. As for the import market, offers from China to Dubai for boron-added 1008 grade wire rod are heard at levels of $540-550/mt CFR for December shipments. For the time being, the end-users in Dubai, whose stocks are at high levels, do not seem inclined to show an interest in these offers under the current circumstances.
The future path followed by the wire rod markets will depend on the reaction of the international market to the struggle of the Turkish mills to raise prices in their local market and on whether the international market is able to follow the example of the rapidly rising trend of the Turkish market. Should the international markets show a positive reaction to the price levels seen in Turkey, then the Turkish mills are expected to increase their prices further. Otherwise, the Turkish mills will have to make downward adjustments to their offer levels.