This week increased activity has been observed in the Turkish domestic wire rod market. Having accelerated their scrap purchases, the Turkish mills have attempted to reflect raw material costs in their wire rod prices. Considering these price hikes to be only temporary, some end-users have delayed their purchases; however, others have moved to conclude purchases, thinking that this uptrend is likely to continue in the coming week. The end-users who concluded their June purchases in the month of May have continued to follow up the price tendency with interest. On the other hand, this week the main problem faced by end-users is still the lack of availability of thin size wire rods for spot purchases.
On the export side, it is observed that Turkish mills have been attempting to increase their offers, just as they have been trying raise prices in their local market. Some Turkish mills have focused their attention on producing high carbon or welded quality wire rod - in order to avoid competition with low-priced CIS offers for low carbon wire rod.
Reaching a certain fullness in their export orders this week, Turkish mills' mesh quality wire rod export offers have increased to the level of $460-480/mt FOB. In the coming week it will be clarified whether these price levels will gain acceptance in the international market.
In addition, the Far Eastern market has maintained its popularity as an export market for Turkish mills. Export sales from Turkey have been this week concluded to markets such as Taiwan, Sri Lanka, Bangladesh, Singapore, South Korea and the Philippines. Due to the strong demand in the Chinese domestic market, Chinese mills' wire rod exports have been standing at high levels as compared to the international market, which helps boost the Turkish mills' chances of competing in the Far Eastern market.
In the Saudi Arabian market, prices have this week shown no change as compared to last week. In the market in question, mesh quality thin size wire rod prices are standing at the levels of SAR 2,100-2,200/mt ex-works. The slow but sure progression of private sector construction projects as well as ongoing government projects are indicated as the main factors having a positive influence on demand in the Saudi Arabian market. However, given that Ramadan starts in August, it is possible that senior management of iron and steel firms in Saudi Arabia may go on vacation at the beginning of July. Consequently, since the people in charge will be absent, new raw material purchases by the companies in question may slow down in July.