The continuing wire rod price increases in Turkey have also influenced the international markets. In the Italian domestic market, it is reported that local buyers are continuing to purchase in order to meet their needs and also to build up some stockpiles for the period after the New Year holiday. In the Italian market, SteelOrbis has learned that local prices for mesh quality wire rod still stand at €480-490/mt (approx. $635-648/mt) for deliveries to customer, partly because of increased local scrap prices and also due to the approaching New Year holiday.
In the Saudi Arabian market, thanks to new construction and infrastructure projects, wire rod buyers continue to conclude transactions. Also in 2011, demand is expected to maintain its current strength. The main problem here is that new bookings are currently not supported by sales of final products (wire, nails), but are only aimed at increasing inventory levels.
Recently, ex-UAE wire rod offers have increased in line with domestic price hikes. This has led Saudi Arabian buyers to opt to conclude their bookings from the local market. Besides, some buyers have told SteelOrbis that, once wire rod inventory levels have increased to a certain degree by the end of January, transactions may slow down in February.
This week, Chinese boron-added wire rod export offers have remained relatively high, leading most international wire rod buyers to look for alternative supply sources, SteelOrbis is reported.
Even if it is a small-size country, Sri Lanka is expected to shine as a lively market. As compared to European markets, the holiday period is shorter in this country. As weather conditions get better, demand is foreseen to strengthen further in Sri Lanka.
While wire rod price hikes mainly resulting from higher raw material prices have started to thoroughly affect the international markets, the extent of buyers' resistance to these increases and the volume of final product sales will ultimately determine the price levels in the market.