Fluctuations observed in the $/TRY exchange rate have been making it more difficult for wire rod buyers to calculate their production costs. Since mills located in Turkey's Marmara region have not been offering wire rod to the market, buyers in this region have continued to purchase wire rod supplies from other regions instead. As of the coming week, we will see more clearly whether the producer located in the Marmara region, which is expected to reopen its wire rod sales depending on orders, will weaken the demand for material from the other regions.
In an important development observed this week, all producers have been focusing on producing high carbon wire rod in line with their sales strategies. Turkish mills have lately been giving greater attention to local buyers, as firms which have refrained from imports have continued to supply wire rod from the local market despite the contracted demand, and also due to the current high levels of domestic prices as compared to the international wire rod markets.
On the other hand, firms who have been leaning towards imports have continued their inquiries to southern Europe in particular. Competitive import offers for high carbon wire rod have been heard from the southern European market, in particular as the mills in this region have high stock levels and as local demand in the region is showing a more sluggish trend compared with demand in the Turkish market. In addition, wire rod buyers seeking to maintain production in line with certain quality standards have been leaning towards imports from this market due to the higher quality of material.
Ex-CIS offers have this week been heard in the northern European market. In the Polish domestic market, mesh quality wire rod prices are standing in the range of €320-330/mt ($416-430/mt) ex-works, excluding VAT. Also, the same quality CIS origin wire rod offers to this market are reported at levels of $420-430/mt DAF Poland for May shipment. Considering the low demand in the Polish domestic market, these offers are currently in the process of being evaluated.
Looking at the general situation, the export route of the Turkish mills will be clarified following the price announcement of the Egyptian mills. Meanwhile, it is possible to say that the Middle Eastern market has been maintaining its popularity as an export destination.