In the Turkish wire rod market, sluggishness in demand has been increasing especially with the approach of August. In particular, the slowdown observed in the finished steel trading volume is causing end-users to behave very cautiously as regards wire rod purchases. In spite of this situation, very competitive sales price levels were heard at the beginning of this week, i.e. on Monday, in the local market; towards the end of the week, however, the producers have been trying to increase their wire rod prices in line with the strong raw material prices. End-users planning to buy material this week have experienced certain difficulties, as some producers have been slow to answer price inquiries and have also been seeking to send lower tonnages than those requested by buyers.
With August approaching, it is becoming harder for Turkish producers to fill their order books for August shipments as the market players in southern Europe are getting ready to go on holiday.
Meanwhile, Far East origin price inquiries to the Turkish wire rod producers have also been heard this week. Thus, while the Turkish producers are turning their attention to these inquiries for spot sales, it seems that only very limited time is available for sales to Europe before the holidays in that region begin.
Meanwhile, as regards demand from the Far East, price inquiries for wire rod in Turkey have this week been heard especially from Taiwan, South Korea, Singapore and the Philippines. Since the local Chinese market is currently maintaining its strength, ex-China wire rod movement to the abovementioned destinations is fairly weak. As a result, for the time being Turkish producers have been making some room for themselves in the Far East market with their competitive prices. For example, it is heard that there are price inquiries from Taiwan in Turkey for low carbon wire rods at $500-510/mt CFR Taiwan for August-September shipments. However, considering the average freight rates, it can be said that on an FOB basis this price range is fairly low.
On the European side, the price range of mesh quality wire rod in the Netherlands is €320-330/mt delivered to customer. It is also mentioned in this country that trading activity will be weak in August; however, the general mood in this market is positive.
While it is heard that drawing quality wire rod in Italy is this week being offered at €350-370/mt delivered to customer, sluggishness on the demand side still exists in this market. With the Turkish export price level at $460-470/mt FOB for mesh quality wire rod, it is reported that there are some offers at lower levels to southern Europe from the same source.
In general, although the Turkish producers are monitoring the US wire rod market closely, in the current situation they have been continuing to turn their attention to the Far East. In the coming days it will become clearer what course of action the Turkish wire rod producers will follow in order to find alternative sales markets.