Low transaction volume in Turkish wire rod market leads to price softening

In the Turkish domestic wire rod market, the low market transaction volume caused local mills' sales prices to soften early this week. While wire rod buyers are reluctant to conclude new bookings due to weak final product (steel mesh, wire, nail) demand, buyers' anticipation of a further price softening is also contributing to the suspension of new purchases.
 
Although construction projects in Turkey have gained speed in the period before the general election (to be held on June 12), final product (steel mesh, wire, nail) demand still remains below desired levels. Unfavorable weather conditions, uncommon for the time of the year, have caused wire bookings in the agricultural sector to be delayed.
 
As regards to Turkey's final product exports, while final product deliveries to Iran for the housing projects of the Housing Development Administration of Turkey (TOKI) still continue, the acceleration of new construction projects in Iraq is expected to boost Turkey's final product sales to this country in the coming period.
 
On the sidelines of the SteelOrbis Spring '11 Conference & 64th IREPAS Meeting held in Hong Kong on April 10-12, market players commented that wire rod demand in the second quarter of this year may be more positive as compared to rebar demand. In the meantime, according to the conference attendees, wire rod purchases in the Persian Gulf region and in the Middle East in general may gain momentum once the political situation stabilizes in the region. On the other hand, wire rod demand in India is forecast to strengthen in the second quarter of this year.
 
In the recent period, the demand contraction in Turkey's traditional export markets has been compensated for by wire rod sales to Central and East Africa, as well as to the South American markets. In South America, Peru and Brazil, thanks to projects for the 2014 FIFA World Cup, are among the most active wire rod markets. In Africa, on the other hand, Kenya and Tanzania are lively in terms of wire rod demand.
 
Turning to North Africa, Algeria is the most active market in the region, while demand in the Tunisian market has returned to normal levels.
 
After filling their order books for April shipments, Turkish mills are offering May production mesh quality wire rod to the export markets at $680-690/mt FOB. However, it is thought that the process of persuading reluctant buyers may continue until the end of April. However, most market players are surprised that, although we have already moved into mid-April, Turkey's wire rod export activities still fall far short of the liveliness observed in March.