A supply shortage has been experienced this week in the Turkish domestic wire rod market. Although prices have been on a stable course, difficulty has been observed in terms of supplying certain wire rod sizes in response to demand from local end-users. Having reduced their outputs to a certain extent, domestic mills have been focusing their attention on producing wire rod grades for export; thus, there have delays in satisfying the demand of local end-users for certain wire rod sizes. The end-users, who have been making continuous purchases of wire rods, have this week experienced problems in determining their own sales prices given the fluctuations seen in wire rod prices.
On the welding quality wire rod side, Turkish producers' offers for S1 grade wire rod given to their local market are standing at $500-520/mt ex-works, while it is heard that a few mills have given offers significantly above these levels. On the other hand, SG2 grade wire rod prices are in the range of $610-650/mt, excluding VAT; however, it is said in the market that last week a few mills have gave offers at considerably below these levels. We mentioned in our last analysis that there were import offers for high carbon wire rod for payments with acceptable deferral periods. However, some end-users have cancelled their import orders and have started to move more cautiously as regards import offers, especially due to the fluctuations seen in the €/$ exchange rate. Meanwhile, end-users intending to purchase from the local market have been facing some difficulties as regards supplies of welding quality wire rod from local producers, since the producers in question have been giving more importance to the production of low quality wire rod for export.
It is said in the market that Turkish mills' wire rod export offers have this week remained at levels of $450-460/mt FOB; however, several mills have tried to keep their prices slightly above these levels. Libya, Yemen, Dubai, Egypt and Saudi Arabia are currently the leading export markets for the Turkish mills. Apparently, as regards exports, Turkish mills will continue to direct their attention to the Middle Eastern countries for a while yet.
The European markets have been quite silent this week as the Easter holiday approaches. In Italy, although mesh quality wire rod prices are said to be at levels of €320-330/mt delivered to customer, excluding VAT, the price levels will gain greater clarity with the conclusion of the holiday. Positive movements in Italy have also given some hope to the Turkish mills as regards the possibility of exporting to this destination in the near future.
With the return of the Europeans from holiday, we will follow with interest the developing situation in the international wire rod markets.