Turkish wire rod mills soften local prices to encourage buyers

In this week's Turkish domestic wire rod market, demand has continued to remain weak. Although some Turkish wire rod producers have announced successive downward price adjustments in order to encourage buyers to conclude new transactions, buyers have continued to remain on the sidelines in anticipation of a further price softening.
 
In the meantime, Turkish final product (steel mesh, wire, nail) manufacturers have been responding to ex-CIS and ex-Europe wire rod offers with quite low counter offers, far below the current market price level. Considering the longer lead times and the freight rates involved, as well as Turkish mills' competitive domestic prices, buyers are currently focusing more on domestic offers.
 
For special quality wire rod, other than mesh quality, Turkish mills' prices also have been softening in the last two weeks. This week, welding quality (SG2) wire rod prices in the Turkish domestic market stand at $840-850/mt ex-works. However, it is reported that for large volume orders, some mills may offer prices slightly below this range. On the other hand, SteelOrbis has learned that some mills, which are operating at relatively low capacity utilization rates and whose export order books are already full, are adopting a rigid pricing policy in their welding quality wire rod offers for domestic buyers.
 
As regards Turkish mills' wire rod exports, this week mills' mesh quality wire rod export offers stand at $690-700/mt FOB for late April and May shipments. Turkish producers are offering the same material to the Indian market with similar shipment terms at $755-765/mt CFR. However, Indian buyers do not seem to be attracted to these offers.
 
As stated in our previous report, wire rod demand has still been maintaining its strength in Saudi Arabia. Market sources report that Saudi buyers are showing interest in ex-UAE wire rod offers at $730-735/mt for deliveries to customer, as opposed to Turkish origin wire rod offers, due to the five percent import duty applied for non-GCC (Gulf Cooperation Council) countries. However, some regional holidays during April are foreseen to have a negative effect on sales to the Middle Eastern market.
 
Similarly, European wire rod buyers are likely to remain reluctant to conclude new wire rod bookings as Easter draws closer. Turkish mills, which have been occupied with shipments of previously concluded wire rod transactions for a while now, are still conducting negotiations for new wire rod sales to the US market.
 
As regards Turkey's final product exports, SteelOrbis has learned that, in the framework of Iran's ongoing projects aiming to satisfy the country's housing needs, two Turkish companies have been undertaking a project for the construction of 25,000 houses and nearly half of this project has already been completed. On the other hand, with the weather getting warmer, steel wire demand in the Turkish domestic market is expected to revive.