In the Turkish domestic wire rod market, some mills started to increase their prices gradually throughout the past week, while others have preferred to upwardly adjust their price lists of wire rod sales in one go. On the end-users' side, those end-users who use high carbon wire rod have abstained from new purchases, while it appears that the end-users who use low carbon wire rod have accepted the new price hikes. However, the daily fluctuations of wire rod sales prices within the past week have caused difficulties for low carbon wire rod buyers in terms of cost analysis. Nevertheless, most firms who had high stock levels before prices switched to a trend of rapid increase have continued to purchase only to satisfy their needs in order to avoid a repeat of their inventory-related problems.
As for the Turkish export market, this week not many wire rod export offers have been heard. Some producers have focused their attention on the local market given their reduced capacity utilization rates, while some others have switched the focus of their mesh quality wire rod sales to the export markets. A few mills' export sales prices for mesh quality wire rod are in the range of $430-440/mt FOB. Export offers from Turkey have shown an increase as compared to last week.
This week, as regards exports, mills have given greater attention to the Middle Eastern markets than to Europe. Turkish mills have continued to do wire rod exports to Saudi Arabia, Iran, Libya and Egypt, while wire producers located in particular in southern Turkey have continued to sell their finished steel products to Iraq. Meanwhile, a close eye has been kept on North Africa as a market where a possible competitive advantage may be gained with the increase of the €/$ exchange rate.
Moving to the southern European wire rod market, one of the important conclusions drawn from the producers' meeting held in the Italian market last week was that iron and steel prices may gain stability in the short term in Italy. This week, the price hikes observed in the Italian rebar market have started to be felt on the wire rod side. It is reported that drawing quality wire rod prices are at the level of €340-350/mt ($461-475/mt) delivered to customer, excluding VAT, while it is thought that prices will gain firmer shape in the coming days. Demand in the market in question has continued to move on a slack trend.
Meanwhile, a positive atmosphere has continued to be seen in the Saudi Arabian market. Rumors are circulating that purchasing activities may gain speed on the back of the relatively high stocks to be sold off, in particular through mid-April. In the Indian market, end-users have quite low inventories and are closely following import offers for their purchases. Local mills in the Indian market are heard to be offering drawing quality wire rod at the level of $500-520/mt ex-works, including taxes.
In the coming days, we will be in a better position to see whether the increasing wire rod prices in the Turkish market will be backed up by international demand. However, considering the low stock levels in the Turkish domestic market, once the price hikes in question become permanent, local end-users, who have this week moved cautiously, may accelerate their purchases.