Market players have been trying to assess the likely developments in the wire rod market in the Mediterranean region, in particular given Turkey’s new safeguard measure against wire rod imports. Prices in the region have been mainly stable in offers from North Africa and Turkey, but the latter is expected to increase offers at least for domestic buyers. Asian suppliers, however, have increased their indications slightly, citing rising futures prices and higher iron ore prices, and the overall positive market mood due to the expected restocking in China.
Wire rod prices from Egypt for February shipments have remained stable since before the holidays at $610-620/mt FOB, while a few Turkish producers are voicing their own export offers at the upper end of the mentioned range. In the domestic market, wire rod prices have for now increased by $10/mt on the lower end of the range over the past week and may inch up further. With the beginning of 2024, Turkey has announced a $175/mt safeguard measure for a period of 200 days and for origins including regular suppliers to the country, namely, Asia, Egypt and Russia. In addition, a quota for wire rod imports from the 113 developing countries totaling 45,665 mt has also been imposed.
Most market sources expect imports particularly from Egypt and Asia to be halted for some time and, moreover, there is already talk about delayed shipments for previously booked orders. “A Chinese trader has 13,000 mt of wire rod from Southeast Asia and it is not loaded due to the duty in Turkey. It may be offered to Europe,” a source told SteelOrbis. However, for now the markets in the EU are still on holiday.
Later, according to expectations, imports of wire rod particularly from Asia and Egypt may continue. However, with the newly introduced measure, both Malaysia and Egypt have lost their duty-free advantage. “They will have to sell now under Turkey’s inward processing regime, which means only to exporting customers, in order to avoid paying the $175/mt tax. It means they are more or less in the same situation as Russia now, but their price gap is too big,” a trader said.
The latest offers from Russia to Turkey for wire rod have been reported at $550-560/mt CFR, while the estimated ex-Egypt offers are at $625-640/mt CFR, depending on the supplier and the volume. Asian suppliers are offering at $555-565/mt FOB, up $5/mt over the past week, with freight estimated at a minimum of $40/mt for a 20,000 mt volume. As a result, competition in the import segment in Turkey may tighten and in the short run local customers are foreseen to restock in the domestic market in order to fill the gaps due to undelivered volumes. In addition, customers who normally do not export products they manufacture from import wire rod will once again be bound mainly to domestic purchases. “This regulation has been targeted at local wire mesh producers,” a trader mentioned.
