In this week's Turkish domestic wire rod market, local steel producers have started to give more competitive local wire rod offers ($675/mt + VAT ex-works and above) in order to tempt buyers to break their silence and conclude new bookings. Because of the slowdown in final product (steel mesh, wire, nail) demand in the Turkish domestic market, final product manufacturers have been abstaining from concluding new wire rod transactions. Meanwhile, the sluggish activity in Turkey's wire rod export markets has been an additional reason for producers to make their local offers more competitive.
As SteelOrbis previously reported, the difference in wire rod prices between Turkey's Iskenderun region and the other regions of the country had widened last week. And this has led traders in the Iskenderun region to start giving wire rod offers. In the meantime, in the Iskenderun region, delayed deliveries of previously confirmed orders and short supplies of wire rod have caused buyers to look for alternative wire rod supply sources.
On the export side, most buyers are in wait-and-see mode as it is thought that export offers may soften further. As per information obtained by SteelOrbis, mesh making grade wire rod offers from Turkey to Saudi Arabia are in the range of $705-715/mt CFR for end of February/March shipments. Inventories of domestic buyers in Saudi Arabia have already reached certain levels, and therefore these buyers are not too eager to conclude new bookings.
In Romania, domestic producers have cut their February prices by €25/mt ($34/mt) over the previous month, revising prices downward to €510-520/mt ($695-709/mt) ex-works. Demand in the Romanian domestic market has been very quiet for some time now. In the coming days, a further softening is expected in the domestic market due to this lack of demand.
To sum up, the problems facing Turkish long product exports have been felt more concretely this week on the wire rod end. Turkish wire rod lately has limited alternatives as regards export markets. The hope is for activity in the market to increase to some extent with the return of China. In any case, it seems the market will continue for another while to remain a buyer's market, with deals generally expected to be concluded only for necessary quantities.
€1 = $1.363