CIS mesh quality wire rod export offers have risen slightly at the start of this month, now ranging at $560-565/mt FOB. The increase in CIS billet prices as well as the rise in Turkish wire rod prices in August and the disappearance of Chinese wire rod from the Mediterranean and the Middle East have all contributed to the increase in CIS wire rod prices.
Turkish producers are offering mesh quality wire rods for export at around $590/mt FOB. The US wire rod market is very calm. Turkish producers had to compete with low-priced Chinese offers in Europe during the second quarter of 2007. In August, they had to compete with low-priced Ukrainian offers in the Middle East. It would difficult to say that exports are going well. Therefore, customers are trying to put pressure on producers. On the other hand, some increases have been experienced in certain southern European domestic markets since the cheaper Chinese wire rods have been used up. If the Turkish producers manage to resist the pressure from customers, they may have a chance of selling at their desired levels.
The price level of mesh quality wire rod in the Spanish domestic market rose to €470-480/mt ($648-662/mt) delivered to warehouse, excluding VAT. Spanish producers have started to raise their prices slightly since the low-priced Chinese wire rods have been exhausted in the post-holiday period. It seems that it is difficult to conclude wire rod bookings from China at the moment due to the high freight rates.
The calm US wire rod market has also affected the Mediterranean market. The increases in Black Sea and some southern European countries provide hopeful signs for the market. Furthermore, Chinese wire rod is not expected to enter the Middle East and Mediterranean due to the high freight rates. Market players do not exactly say that the wire rod market will rise since the market is not strong enough, despite all positive improvements. Therefore, most market players prefer to wait for further indications of the market's direction.