Last week, a feeling of anxiety predominated on the wire producers' side of the Turkish high carbon wire rod market due to the instability of wire rod prices. It is said that, similar to low carbon wire rod buyers, end-users in this market were purchasing only to satisfy their needs and had started to keep their stocks at low levels compared to previous times.
One of the most important problems on the demand side has been the limited options with regard to supply of high carbon wire rod in the Turkish market. Recently, some producers in the local market have been focusing their attention on low carbon wire rod production instead of high carbon wire rod production, while some others have followed the opposite strategy. A large price difference has been observed among producers in the domestic market. It is reported that high carbon wire rod prices of some mills were last week standing at the average level of $750/mt excluding VAT, while some mills were offering this quality wire rod at far higher than the level in question.
Meanwhile, it was reported that import offers given from southern Europe for high carbon wire rod were last week in a price range of €600-650/mt ($767-831/mt) CFR Turkey for January shipment. In addition, it was reported that during the week in question some European producers offered high carbon wire rod for small tonnages below these levels in order to sell off their stocks.
On the demand side, varying opinions have been heard as regards high carbon wire rod imports. Some wire producers who need to deliver orders on time have been moving cautiously with regard to imports, since it has been difficult to estimate lead times for import wire rod and they cannot foresee the price levels in the coming period when the import materials will have arrived in the local market. On the other hand, since there is no stock cost for some wire producers, they have leant towards imports in order to ensure certain standards of quality.
In the upcoming days we will be better able to see the future direction of the high carbon wire rod market, where end-users have been feeling the effects of price changes more slowly compared to low carbon wire rod market.