Demand appears quiet in international wire rod markets

In the Turkish domestic market wire rod prices increased yesterday, May 11, on Turkish lira basis to reach TRY 1,360-1,426/mt including VAT, (TRY 1,153-1,208/mt excluding 18 percent VAT - approx. equivalent $727-762/mt), after having following a stable trend since last Friday. The US dollar/Turkish lira exchange rate is now at 1.58 levels and this was the main reason for the price revision.
 
The silent state of wire rod demand has continued in Turkey since last week. Wire rod buyers still buy only as per their requirements, and the demand revival seen in the last week of April is no longer valid.
 
Wire rod buyers in Turkey have put their purchases on hold, particularly from southern Europe, in view of the euro/dollar exchange rate reaching  1.49. This week the exhange rate slipped back to 1.42, making negotiations for wire rod exports from southern Europe possible again.
 
Early this week, the Victory Day in Russia and Ukraine caused an absence of CIS offers in the market. Following the holiday, low carbon wire rod offers for June shipments started to be offered at $720-730/mt FOB, as SteelOrbis has learned.
 
In the meantime, mesh-making grade wire rod prices in the Italian domestic market continue to stand at €520-530/mt delivered to customer. Mesh-making grade wire rod demand in Italy is described as weak in May. Following the softening in the exchange rate, export offers from Turkey to Europe are less attractive to Italian buyers.
 
This week the domestic wire rod market in Bulgaria saw stockists' price levels for mesh-making grade at BGN 980-990/mt CPT ($711-718/mt) on actual weight basis. Demand has not reached the desired levels yet. Following the expected price rise in the Montenegrin market last week, the price for 6 mm and above low carbon wire rod reached €530-535/mt ($754-761/mt) CPT on actual weight basis.
 
Demand for final products (wire mesh, nails, etc.) is getting stronger in the Turkic republics in Central Asia, as we mentioned in our previous analysis, due to the stronger activity in their construction sectors. In addition, Turkish wire producers have started to improve their sales to EU countries as of last week with the advantage of the euro/dollar exchange rate, as SteelOrbis has heard from the market.
 
1 USD = 1.58 TRY