This week, with the influence of the $/TRY exchange rate fluctuations observed in the Turkish wire rod market, anxiety has predominated on the end-users' side. Although a gloomy outlook is seen in terms of end-user activity in general, it is heard that orders given to wire producers which serve the agricultural sector have increased recently. Most end-users' stocks are at low levels at the current time; however, it is heard that some end-users have continued their purchases in order to have sufficient materials in stock and thus be in a position to deliver their orders. Nevertheless, it is a fact that due to the additional price decreases some end-users continue to delay their purchases until they have first sold off their stocks.
Wire rod demand has been following a sluggish trend in the southern European market, which is one of the most important markets for wire rod. It is reported in this market that end-users' inventory levels are not very high, while, on the other hand, producers have high stock levels. It is also heard that producers who for a long time now have been contracting their production capacities and have implemented a shift system in production have recently been trying to assume an active role on the export side due to the slow demand in their domestic market.
In particular, it is heard that the number of southern European origin wire rod offers to Turkey have this week increased. Import offers given from this region for SG2 grade wire rod are at the level of €540-550/mt ($686-699/mt) CFR Turkey for March shipments, while for thick sized mesh quality wire rod these offers are standing at the level of €420-430/mt ($534-547/mt) CFR Turkey, with the same delivery terms. End-users have been leaning towards these offers for now, due to their more acceptable levels as compared to domestic prices.
In Italy, one of the most influential wire rod markets in southern European, mesh quality wire rod is standing at the price level of €360-370/mt ($458-470/mt), excluding VAT, while drawing quality wire rod is being offered at the level of €370-380/mt ($470-483/mt), excluding VAT. Meanwhile, it is heard that Turkish mills have offered drawing quality wire rod to Italy at €380-390/mt ($483-496/mt) CFR Italy for March shipment; however, this offer has not attracted end-users' interest given its high level as compared to the local market prices.
This week, stocks in the Romanian market are at medium levels. It is heard that in this market mesh quality wire rod has been offered by local mills at an average level of €390/mt ($496/mt) ex-works, excluding VAT. Also, demand in Romania has remained stagnant. On the other hand, in the Bulgarian domestic market where demand has been on a slack trend, domestic wire rod prices have still been at BGN 780/mt ($519/mt) on average.
Generally, Turkish producers have continued to seek new export markets, while it is seen that some end-users are showing caution in terms of doing business with markets to which they have not exported previously. We will wait and see what strategy the Turkish mills, who have so far been actively involved in the southern European market in terms of export, will follow in order to attract the interest of domestic end-users, who for their part have been anxious about the effect of the exchange rate on the local market in Turkey.