This week the Turkish wire rod market has been characterized by a wait-and-see stance on the part of end-users. The fluctuations seen in the iron and steel market has led end-users to feel anxious about the current market situation. During the current week, the main problems facing end-users were the difficulty of supplying wire rod of certain sizes and the stagnation seen in the finished steel market. Against the background of end-users' intention to purchase wire rod which needs high-quality scrap as a raw material, some mills have delayed the delivery dates of such products. Also, rumors are circulating that some end-users have been trying to purchase SG2 grade wire rod below the levels of $950/mt, while the Turkish mills are offering wire rod of the same grade in the range of $910-950/mt.
Some end-users who are not satisfied with the local market prices have this week preferred to import. In particular for mesh quality, it is heard that there are wire rod offers to Turkey at the level of $500/mt FOB southwestern European ports and that some end-users have been inclined to buy at these levels. Meanwhile, offers from China to Turkey for boron-added wire rod are standing at $550/mt FOB China. However, it is obvious that the recent local prices are more reasonable than the Chinese offers.
In addition, it is heard that import offers for high carbon wire rod are in the range of €680-700/mt ($853-878/mt) CFR Turkey for December shipments. End-users are seeking to bring these offer levels down further.
In Italy, the price levels of wire rod have this week shown signs of improvement, though end-user demand has not been stimulated. In contrast to the more rapid price increase seen in the Turkish market, the prices of mesh quality wire rod in the Italian domestic market have reached the range of €400-430/mt ($502-539/mt), excluding VAT. Meanwhile, the mills' wire rod stocks are reported to be at high levels and so the end-users who feel anxious about the future market have been delaying their purchases even though their own inventories are at low levels. It is heard that offers from Turkey to Italy for mesh quality wire rod are standing at $500/mt CFR Italy for December shipments. In the coming weeks it will be seen with greater clarity how Italian end-users, who will have a long holiday period in December, will react to the price increases and whether they will purchase or not.
This week, mesh quality wire rod in the Bulgarian market is standing at the level of BGN 900/mt ($577/mt), excluding VAT. It is also heard that in this market difficulty is being experienced with regard to supply levels and that some mills are trying to cope with financial problems, as are some of the construction companies. We will be better able to see whether this low demand manages to make a recovery in the coming days.
As for the Polish market, mills' offers for mesh quality wire rod are standing at an average level of €430-440/mt ($539-552/mt) for delivery to customer, excluding VAT, whereas traders' offers for the same grade wire rod are at €415-420/mt ($520-527/mt) ex-warehouse. Meanwhile, it is heard that Russian mills are offering mesh quality wire rod to the Polish market at €350/mt ($439/mt) FOB Baltic Sea, for December shipments. This week in the Polish market demand has been on a calm trend, with end-users concluding minimum purchases just to satisfy their needs.
In the period ahead we will be better able to see what direction end-users will choose as regards new purchases given the sharp increases and decreases seen in price levels. Due to the negative reaction of the international markets to the rapid increases of Turkish mills' export offers, some mills have decreased their offers to the range of $520-550/mt FOB. We will wait and see in the coming days what strategy the Turkish mills will follow to overcome the demand bottleneck.