Following the strengthening of the US dollar against the Turkish lira, wire rod prices in the Turkish domestic market, excluding the Iskenderun market, have increased by TRY 40/mt ($24/mt) as compared to last week, reaching TRY 1,540-1,580/mt ($777-797/mt + VAT) ex-works, inclusive of 18 percent VAT. After this price increase, having difficulties in reflecting this cost increase in their own sales prices, many final product (steel mesh, wire) manufacturers have decided to limit their bookings in line with their needs or to adopt a wait-and-see approach to booking activity. In the meantime, it was expected that buyers might increase their wire rod inventories towards the end of this month. However, it seems that such expectations have not been realized so far in the current month.
Following wire rod price hikes in their domestic market, Turkish buyers have continued to assess import opportunities. Since Ramadan will begin at the start of August, Turkish buyers prefer offers with arrival dates in September. A similar attitude is also observed in the Middle East.
This week, ex-CIS low carbon wire rod offers have remained at $745-750/mt FOB, for September shipments, while ex-Italy low carbon wire rod offers are still at €520-525/mt ($744-751/mt) FOB, for August shipments.
Following a sideways trend during July, Italy's wire rod export offers are expected to be updated after the summer holiday in August. Last week, Italian buyers concluded their wire rod bookings within the scope of meeting their needs mostly from their domestic market, due to the aggressive domestic pricing policy of Italian mills.
Turkey's mesh quality wire rod export offers, which were at $750-760/mt FOB last week, have been found to be on the high side in the international markets. In addition, since Middle Eastern buyers prefer to book material for arrival in September, Turkey's wire rod sales to this region have slowed down. On the other hand, Italian and other European buyers have slowed down their wire rod imports due to the approach of the summer holidays.
Last week, traders in Vietnam tried to persuade local buyers to accept an increase in wire rod prices. However, failing in their attempt, traders have now slightly softened their wire rod prices to VDN 16.2 million/mt ($788/mt), on actual weight basis, including 10 percent VAT and all taxes. In the meantime, the monsoon season still prevents wire rod demand in India from recovering.
While Latin American as well as the West and Central African markets are still among Turkey's wire rod export markets, it is yet to be seen to what extent these markets may absorb Turkey's wire rod production volume.