Ukrainian origin mesh quality wire rod prices have recorded up to $30/mt decrease for late August shipments - in line with expectations. Although not all producers have yet issued their prices, the prices which have been announced are in a range of $530-535/mt FOB. While this price range is at an acceptable level for the Middle East and Eastern Europe, it seems that it is not very competitive in the Algerian market due to the drop in Italian prices and the tax imposed in Algeria.
Turkish mesh quality wire rod offers for export are at $560-565/mt FOB. The European market is very slow due to the high stock levels and low prices in this market. Although the market was slow in June, Turkish producers were able to make sales to some markets at their desired prices since CIS origin prices were closer to Turkish price levels. However, the decline in Ukrainian prices may put pressure on the Turkish producers.
Stock levels are very high in southern Europe. According to reports, there are huge quantities of goods, mostly of Chinese origin, at the ports. The price level of mesh quality wire rod in the local Italian market is at around €450/mt ($614/mt) ex-works, on actual weight basis with 60-day open account, excluding VAT. For exports, Italian producers' FOB offers are lower than this price level.
Mesh quality wire rod prices in the Spanish domestic market are at €460-480/mt ($628-655/mt), depending on sizes, delivered to warehouse. However, it is heard that there are some prices lower than this level.
Chinese wire rod offers to southern Europe have lost their competitiveness since the export tax came into effect. Current Chinese offers for southern Europe, which are at €480-490/mt ($655-669/mt) CFR, are not competitive.
After having upset the balance of the Mediterranean and Middle East wire rod markets in 2006 and for nearly all of the first two quarters of 2007, Chinese wire rod has been absent from the market for one month now. However, despite this, the price trend is weak due to the high stock levels and the seasonal slowdown. On the other hand, if the stocks on hand see a reduction in late July and early August, the wire rod market may adjust itself in an upward direction for September shipments, taking advantage of the Chinese absence.