Global wire rod suppliers from several regions have restarted offering to the EU, even though most buyers are still on holiday and are mainly absent from the market. As a result, market players find it tough to estimate the workable levels, but there is a general expectation that prices may firm up, taking into account the pre-holiday mood in the EU and the recent price rise in the scrap and billet segments in the Mediterranean region.
According to sources, ex-Asia offers have increased by around $10-90/mt over two weeks for February-March shipments. Vietnam is offering at $680/mt CFR, while Indonesia and Malaysia are both at $690-695/mt CFR, SteelOrbis has learned.
Another supplier from a distant market, the UAE, has offered at $670/mt CFR to the south of the EU this week for February shipments.
In the meantime, one of the Algeria-based mills has been offering at $610-620/mt FOB for wire rod this week depending on the steel grade, while Egypt has been offering at $630-640/mt FOB. The average freight from North Africa to the EU is estimated at $35/mt for large lots to Italy, while transportation for low quantities may be as high as $55-60/mt, SteelOrbis understands.
In such a situation, Turkish mills, who have increased their offers by $50/mt to $720-730/mt FOB, are in a disadvantageous position in relation to their competitors, even despite somewhat shorter lead times and lower freight rates.
Domestic wire rod prices in the EU are expected to increase next week, once the mills are back from the holidays. The latest domestic offers for SAE1006 in Italy were standing at €700-720/mt DAP before the holiday.