Wire rod buyers in international markets continue to remain cautious as regard to new purchases due to financial turmoil in the global economy, while Turkish wire rod buyers are closely following European wire rod suppliers' offers, aiming to enjoy the advantage of weakened euro.
Assessing effects of the financial turmoil in the global economy on the Turkish market, after the international credit rating agency Standard and Poor's has upgraded Turkey's credit rating and following the $/TRY exchange rate hit 1.83, wire rod prices in Turkish lira basis in the domestic market have increased. Accordingly, wire rod prices in the local Turkish market, excluding the Iskenderun market, which were at TRY 1,570-1,640/mt ex-works -inclusive of VAT, have reached TRY 1,610-1,660/mt (approx. $750-770 + VAT) ex-works as of today. However, the same upward momentum has not been observed in the local wire rod demand.
As it was also mentioned in our previous analysis, most Turkish wire rod buyers are assessing wire rod import offers. In the meantime, some Turkish buyers, who have concluded wire rod transactions when the €/$ exchange rate was 1.45, are now confused with the exchange rate hitting 1.34 this week.
Seeing Turkish buyers focusing more on wire rod import offers, some international trading companies have started to place offers for ex-southern Europe wire rod to Turkish buyers. As for southern Eruopean wire rod export offers, Italian suppliers are offering mesh quality wire rod to export markets at €525-530/mt ($704-710/mt) FOB, while their drawing quality wire rod export offers stand at €535-540/mt ($717-724/mt) FOB. Last week, some market players were expecting Spanish mesh quality wire rod export offers to reach €530-535/mt FOB. However, this expectation has not materialized yet and Spanish mesh quality wire rod export offers are still at €520-525/mt ($697-704/mt) FOB.
On the other hand, medium carbon wire rod (C45-65) offers from central Europe to Turkey stand in the price range of €600-610/mt ($804-817/mt) CFR on actual weight basis, for arrival in October. SteelOrbis has learned from market sources that Turkish buyers are leaning towards these offers.
Turkish mills' wire rod export offers have remained unchanged this week at $745-755/mt FOB, while it is heard that slightly lower offers are also available in the market for real buyers, due to international financial depression.
In the Bulgarian domestic long steel market stockists' mesh quality wire rod prices have increased slightly as compared to last week, reaching BGN 1,080-1,090/mt ($744-751/mt) CPT on actual weight basis, exclusive of 20 percent VAT. It is reported that Bulgarian mills have mirrored price hikes on the TRY basis in the Turkish domestic market.