The Turkish wire rod market made a slow start to the current week. Due to the official holiday on Tuesday, May 19, this week it took much more time for the market to acquire shape in terms of price levels. However, while Turkish mills have continued to seek alternative export markets instead of Egypt, they still prefer to sell their materials to the local market which has been trending at high levels as compared to the international wire rod market. End-users in the Turkish domestic market have continued to maintain a wait-and-see stance. In general, while the stock levels of local end-users have continued to decrease, there is a lack of confidence in the finished steel market with demand showing a contraction. For this reason, wire rod buyers have been moving more cautiously in terms of their purchasing decisions.
This week Turkish mills' export offers for mesh quality wire rod have continued to stand in the range of $460-480/mt FOB, while it is heard that there are offers given slightly below these levels for high tonnages.
It is observed that wire rod prices have this week softened in the Romanian market. Romanian mills are offering mesh quality wire rod in the range of €350-360/mt ex-works. Meanwhile, ex-CIS wire rod offers to this country are reported to be at levels of €330-340/mt DAF for June shipments. On the demand side, stocks are at normal levels, while it is expected that silence will continue on the demand side for a while yet. Approaching the end of May, some end-users expect that the mills will raise their offers slightly in order to boost demand.
As we look at the southern European wire rod market, although in Italy the season is traditionally a strong one for construction activities, demand has not shown the expected improvement and this has caused a negative atmosphere in the market. In the Italian market, it is observed that prices have shown some softening due to low demand. In the northern regions of Italy, mesh quality wire rod prices are at the levels of €340-350/mt delivered to customer, excluding VAT, down €10/mt as compared to last week, while in the same region drawing quality wire rod prices are in the range of €350-360/mt delivered to customer, excluding VAT. Mills in Italy are expected to continue to cut their production outputs for a while. As for Italy's import market, the fluctuations seen in the €/$ exchange rate and long lead times for imports have caused a lack of interest in import offers in the current period of time.
While some Spanish producers' low carbon wire rod offers to their local market are standing at €380-400/mt delivered to customer, due to low end-user demand it is unlikely that these offers will be accepted.
It is expected that Turkish producers will continue to focus on their local market, unless they manage to find an alternative export market to Egypt. Market players will continue to watch with interest to see whether there will be a solution in the short term to the current contraction in international wire rod demand caused by the start of the summer season.