The import segment in Turkey’s wire rod market has been filled with offers from several foreign suppliers and the prices are in a rather wide range, though they are still found to be quite competitive. Such a situation impacts domestic wire rod producers, who have lately been forced to put exert effort to attract local customers. Despite the significant price gap with imports, local wire rod offers still have the advantage of short lead times since the suppliers from North Africa and Asia, particularly, are offering for March shipment at the earliest. However, a few international traders are focusing on wire rod sales from Turkish ports, while some limited volumes are expected to arrive at the end of January. In addition, some suppliers offer wire rod of origins subject to zero import tax in Turkey, which is also a significant advantage.
Currently, ex-Egypt wire rod offers are standing at $680-690/mt CFR Turkey for 3,000-5,000 mt lots for March shipments. A similar lead time is also available from Algeria for wire rod at $660-665/mt FOB and the freight for the same lots is estimated at $35-40/mt and for 10,000-15,000 mt is estimated at around $30/mt.
Offers for wire rod from Russia and Donbass have been reported at $630/mt CFR northern ports of Turkey, marking the lowest level in the market due to the material’s sanctions-related toxicity. However, some Russian offers have been heard at $655/mt CFR, most probably for material less impacted by sanctions.
Malaysia was offering at $680/mt CFR last week, while some sources report similar levels are still available, while some expect offers to be $5-10/mt higher by the end of the current week.
The increasing presence of overseas wire rod suppliers may become a greater threat to the Turkish mills, particularly since some origins are not restricted by import duties. Specifically, Egypt’s material is tax free due to the free trade agreement with Turkey, while import tax for ex-Malaysia volumes, previously at 1.3 percent, has been reduced to zero this year. The trade restriction on Russian origin material has been kept at around 30 percent, but the price discount provided partly covers the gap. In any case, most buyers are trying to import via the inward processing regime. However, another issue is, according to sources, that some wire rod importers in Turkey have their export licenses full for now and so they cannot increase their import volumes easily.
Turkish domestic official wire rod prices vary at $720-750/mt ex-works, though additional discounts are applicable for serious buyers, SteelOrbis has heard. “The producers are willing to keep their local wire rod prices firm despite the sluggish demand, while production costs are high, specifically related to energy,” a source told SteelOrbis.