In the Turkish domestic wire rod market prices have continued to increase, due to higher raw material and steel billet prices, raising the concerns of buyers in the local market. At the end of November, Turkish wire rod buyers started to replenish their inventory levels for December to some extent, resulting in increased demand in the local market. In the meantime, the strengthening of the US dollar against the Turkish lira also affected wire rod sales price adjustments in the Turkish domestic market.
This week, Turkish mesh quality wire rod export offers have started to be seen in the range of $625-630/mt FOB for December shipments. In the current period, among the Middle Eastern markets, Saudi Arabia, Syria, Dubai and Lebanon, as well as Egypt and Libya from North Africa, are the key export markets for Turkish producers. Meanwhile, the Iranian and Iraqi markets also continue to be important export markets for Turkey. To all these markets, Turkey not only exports wire rod, but also a significant amount of final products such as steel mesh and wire. Ongoing and planned public construction projects also support demand in these markets.
In the southern European market, increased scrap prices have helped to lift up wire rod sales prices. This week, an increase of €10-15/mt ($13-20/mt) has been recorded in the region, as compared to last week. For example, in Italy, mesh quality wire rod prices have increased to the level of €460-465/mt ($606-612/mt) for deliveries to customer.
In the Italian market, where preparations for Christmas/New Year are expected to begin by December 20, local sales seem to be more frequent than export sales this week. Meanwhile, Italian wire rod buyers, who continue to make bookings on a weekly basis, are adopting a cautious approach to the price increases. In Europe overall, as winter conditions become more difficult, a slowdown is seen in construction projects.
In the coming period, the strength of demand in the Middle East and trends in raw material prices will exert a strong influence on wire rod price adjustments.