This week silence has predominated in the Turkish domestic wire rod market. The contraction of international demand, which has started to be felt clearly in the markets, has increased pressure on both end-users and producers in Turkey. Some Turkish producers who have succeeded in partially filling their order books for March are heard to have more pessimistic expectations with regard to April.
Looking at Turkey's wire rod exports as based on the Istanbul Mineral and Metals Exporters Association (IMMIB) data, the markets of Italy, Saudi Arabia and Holland have registered a progression. Exports to Italy, which stood at 29,210 mt in the January-February period of 2008, have increased to 45,485 mt in the same period of the current year. Similarly, export wire rod tonnages to Saudi Arabia have this year increased to 24,000 mt compared with 4,440 mt in January-February 2008. As we compare the periods in question for Holland, the export figure is seen to have increased from 18,565 mt to 20,700 mt. Despite these increased tonnages, price decreases should also be taken into consideration when evaluating these figures.
With regard to the major markets (again according to the IMMIB data), it is seen that the downtrend has this week continued in the Italian market. It is heard that mesh quality wire rod prices which in previous weeks were at an average level of €350/mt delivered to customer, excluding VAT, have this week decreased to an average of €330/mt delivered to customer, excluding VAT, due to decreased scrap prices and weak demand. As for inventory levels, it is heard that mills' stocks are still standing at high levels, while distributors' stocks are at normal levels. It is also said that an improvement may be seen in the market, based on the sales of stocks by distributors.
In the Italian market, where almost every mill has cut output, market players are not expecting any positive development in the short term. This week Turkish mesh grade wire rod export offers to this country are standing at the level of $420/mt CFR Italy for late March/April shipments. Against the background of the slack demand observed in the local Italian market, these offers have not succeeded in attracting buyers' attention.
On the other hand, in Saudi Arabia local mills' wire rod sales prices are found in the range of $615-620/mt ex-works, excluding VAT. It is also reported that some Saudi Arabian firms which process wire rod as a raw material have demanded offers from CIS countries. Rumors are circulating that some previously-suspended construction projects have started to be resumed depending on changing price conditions and that the market may show some activity in the short term in line with the resumption of work on the projects in question.
This week on the Turkish wire rod export market side, the Middle Eastern market has been more active than the European market. Turkey's most prominent export markets in the Middle East are Saudi Arabia, Libya and Egypt, while it is heard that some sales have also been concluded from the southern regions of Turkey to Iraq. Some Turkish mills' mesh quality wire rod export offers are standing at $430-440/mt FOB; however, it should be taken into consideration that prices may show variation depending on the local dynamics of the export market. Furthermore, buyers intending to conclude actual deals for significant tonnages will surely have significant leeway in the negotiation of prices.
€1 = US$1.27610