This week the price increase expectations in the Turkish wire rod market for after the holidays so far appear to have been left unfulfilled. Daily variation in price levels has been seen in wire rod sales in Turkey due in particular to the weakening of the US dollar against the Turkish lira. This situation is making things more difficult for the Turkish wire rod producers that give US dollar-based offers to the local market.
Meanwhile, having anticipated a rise in prices after the holidays, wire rod buyers in Turkey, who had previously bought wire rods (including small tonnages) before the New Year, seem a bit disappointed now. On the other hand, after the holidays conclude in Ukraine and Russia, which are alternative buying markets, it is expected that these countries will return to the market next week.
In relation to the Middle East wire rod markets, it is worth noting that the Saudi government has lately unveiled a large budget for the 2010 fiscal year. Significantly, the 2010 budget includes $69.3 billion for new and existing infrastructure projects in the areas of power generation, construction, and transportation. The figure in question reflects a sixteen percent increase from 2009. In this context, market players think that steel trade activity to Saudi Arabia is likely pick up in the near future.
On the other hand, the world's largest free trade area by population, i.e., the area which includes China and the six ASEAN (Association of Southeast Asian Nations) founder countries, came broadly into effect on January 1 this year. Thus, market players will also monitor how wire rod sales from Turkey to the Far East will be shaped by this development.
In conclusion, on the wire rod demand side in general, since most European countries have returned from their holidays, it is expected that the number of price inquiries from Europe to Turkey will gain speed as of next week and it is also expected that Turkish wire rod export prices to Europe will acquire greater clarity. Meanwhile, the signs of an uptrend in wire rod prices in the US are causing Turkish wire rod producers to monitor the US wire rod market very closely.