Following the scrap transactions concluded last week, sales prices in the Turkish wire rod market have this week followed an upward trend. In our report last week, we mentioned that prices could be revised upward in order to forestall any softening of the price trend. Meanwhile, the market has been more active this week due to the approach of the end of June and also due to buyers' desire to increase their inventories to some extent.
Buyers in the Iskenderun region of Turkey, where there has been a significant price gap with the country's other regions for a long time now, are seeking different solutions in order to avoid the risks posed by this situation. Mills that want to maintain their ability to compete in end product (steel mesh, wire) sales are obliged to calculate their costs with greater caution in order to retain a share in the shrinking export market. In the local market in particular, poor weather conditions have caused a slowdown in construction projects and in product sales to the agricultural sector.
International buyers, worried about the stability of price increases, have been following the tax rebate situation in China with great interest. Buyers in the Middle East market are also keeping a close eye on the developments in question. Although wire rod demand from Dubai has been reaching the Turkish producers, buyers in Dubai do not want to increase their inventory levels much due to the start of Ramadan in August.
Buyers in the local Turkish market have been hesitating to import wire rod due to the lead times involved. However, it will be interesting to see if they turn again towards wire rod import offers after the price hike attempts observed in the local market this week. Market players will also watch to see how much support the current upward price trend will receive in the export markets.