It is observed that the price levels of mesh quality wire rod have this week shown a slight softening in the Turkish domestic market. Due to the approaching holiday period, stagnation is seen on the end-users' side. The common problem seen this week with regard to the Turkish mills and end-users are their export difficulties. After December 15, we will be better able to see how market players try to overcome this problem, also taking into account that the European holiday period will start on December 20. It is foreseen that the Christmas holiday period in Europe will last till the third week of January. In short, in December it is expected that there will not be much trading activity in terms of wire rod in the European market.
Turkish end-users have generally been registering sluggish activity with the approach of the holiday; those firms which are in a rush to deliver their orders have this week continued to purchase, while firms which are not under pressure from orders have delayed their purchases for another while. In addition, there are also problems with payment collection in the market. The mills who are trying to sell their materials for cash or for short-term deferred payments are having difficulties in finding customers willing to purchase under these conditions.
The price softening seen in mesh quality wire rod in the Turkish domestic market has not been reflected in electrode grade wire rod, and the prices of SG2 grade wire rod continue to stand in the range of $900-950/mt, excluding VAT, for 30-day deferred payments.
This week, on the import side of the Turkish domestic market, it is heard that there are offers from Russia to Turkey for 1006 grade (drawing quality) wire rod at the level of $580/mt CFR Turkey for January shipment, while there are offers from Ukraine to Turkey for mesh quality wire rod in the range of $430-440/mt FOB Ukraine. Meanwhile, on the export side, the Turkish mills continue to give offers below the level of $500/mt in order to raise the weak levels of international demand. The problem here is that the demand shrinkage seen in the finished steel markets has caused a lengthening of the response period for offers and has led some end-users to delay their purchases given the difficulty of forecasting the future market trend.
In Italy, an optimistic atmosphere has finally come to the fore in the domestic market. Increasing scrap prices have this week made their influence felt in the domestic wire rod market. It is heard that mesh quality wire rod prices have reached the level of €420/mt ($534/mt) for delivery to customer. Also, there is a general expectation in the market that price levels will show further increase in the coming week. This week, supply and demand were balanced in the market and rumors are circulating that new purchases of steel welded wire mesh producers in particular will gain momentum. The most important problem in the market in question is the upcoming holidays in different markets.
On the other hand, it is said that mesh quality wire rod in the Spanish domestic market is at the level of €380-400/mt ($483-508/mt) for delivery to customer. It is heard that there is a slight increase as regards the demand level and that some end-users will delay their purchases for a while.
In the Romanian domestic market, this week mesh quality wire rod has maintained the level of €380/mt ($483/mt) excluding VAT, while it is heard that there are offers from Moldova to this region for drawing quality wire rod at the level of $430-440/mt DAF Romania for December shipments.
To sum up, the concerns of end-users first need to be relieved in order to ease the effect of the demand shrinkage in the international markets on the sales of finished steel products; then it may be possible to see an acceleration of purchases. We will be better able to see to which markets the mills with export difficulties will direct their attention during the December holiday periods in the Middle East and Europe.