Turkish buyers still delay wire rod bookings as October draws to a close

In the Turkish domestic wire rod market, local prices on Turkish lira basis have seen some decreases this week as the Turkish lira/dollar exchange rate decreased again to 1.76, down from last week's 1.87. Accordingly, wire rod prices in the local Turkish market, excluding the Iskenderun market, are now standing at TRY 1,460-1,510/mt ($703-727/mt + VAT) ex-works, inclusive of VAT. This price range indicates a decrease of TRY 50-60/mt as compared to last week.
 
Following this price decline, most Turkish buyers, who were expected to increase their inventory levels by the end of October, have delayed their bookings and prefer to meet their urgent needs only. The European Commission's meeting to find solutions to resolve the debt crisis ended today. The outcome of this meeting is anticipated to reshape the euro/dollar exchange rate, also eventually impacting Turkish mills' wire rod export offers. Another effect of the exchange rate change would be the formation of new wire rod offers from Europe to the Turkish market.
 
Currently, Turkish wire rod buyers prefer to meet their needs from the domestic market rather than from import markets, enjoying the strong bargaining power available for real buyers. This week, ex-Italy mesh quality wire rod offers stand at €510-515/mt ($714-721/mt) FOB. Considering that the euro/dollar exchange rate has declined to 1.40 and that today's orders will arrive by late November, this price range is not that attractive for Turkish buyers. In the meantime, Ukrainian low carbon wire rod offers continue to stand at $685-690/mt FOB.
 
In line with sluggish final product (steel mesh, nail) demand in the Turkish market, Turkish wire rod buyers are not inclined to increase their wire rod inventory levels right now. However, these buyers are expected to increase their stocks once they believe that prices have reached the bottom and it is thought that this may happen after the Feast of Sacrifice holiday, in the second week of November.