International wire rod markets still under influence of €/$ exchange rate

In the Turkish domestic wire rod market, buyers are now adopting a wait-and-see stance, as the US dollar/Turkish lira exchange rate reached 1.90 toward the middle of the week, though it is lower now.

Since the US dollar is not alone strengthening against the Turkish lira but against the euro as well, with the €/$ exchange rate declining to 1.31 during this week, Turkish mills' negotiations with European wire rod suppliers for new bookings have gathered pace this week. Unless wire rod prices in the Turkish domestic market drop to levels as competitive as ex-Europe offers, it is thought that Turkish buyers may then seek to obtain much of their wire rod needs from Europe.

Italian wire rod offers, which have had an advantage for a while due to the weakness of the euro, are still being heard frequently in the international wire rod markets. Particularly, apart from Turkey, Italian suppliers' wire rod offers are also being assessed in Balkan markets. This week, Italian mesh quality wire rod export offers have further softened, declining to €525-530/mt ($698-705/mt) FOB. However, offers for Balkan markets are slightly below this price range.

In the meantime, Turkish mills mesh quality wire rod export offers this week stand at $725-730/mt FOB, while slightly lower offers are also available in the market for real buyers.

In September, Turkey's top 10 wire rod export destinations were as follows:

Source: Istanbul Mineral and Metals Exporters' Association (IMMIB)

Assessing Turkey's wire rod exports, as an outcome of the fluctuations in the €/$ exchange rate, it may be said that Turkish mills have been focusing on Latin American and Central African markets for a while. In the meantime, Turkey's wire rod exports to Bulgaria in September this year amounted to 1,200 mt, whereas Turkey did not export any wire rod to Bulgaria in September last year.