The effects of the turmoil in the global economy are also being felt in the international wire rod market. Particularly, the impact of Greece's economic difficulties on the euro zone is causing European wire rod demand to narrow.
From Turkey's side; in Italy, a key wire rod export market for Turkish mills, economic challenges are causing Italian buyers to remain unwilling to conclude new import transactions. In the meantime, as SteelOrbis has reported, Italian steel producer Lucchini has decided that the 90 employees at its wire rod mill in Lecco will work part-time for one year from September 27, as a measure to help it to face the deep crisis it is currently going through. This reflects the current situation in the Italian wire rod market.
In the Turkish domestic market, local producer Kardemir increased its rebar sales prices yesterday. However, this price hike is not reflected in domestic wire rod prices yet. Accordingly, wire rod prices in the Turkish domestic market, excluding the Iskenderun market, are currently standing at the price range of TRY 1,570-1,640/mt ($748-781/mt + VAT) ex-works, compared to last week's price level of TRY 1,570-1,630/mt ($752-776/mt + VAT) ex-works, inclusive of 18 percent VAT.
In this week's Turkish domestic final product (steel mesh, wire, nail) market, collection of payments from previous final product sales is still a problem. Thus, most Turkish final product manufacturers have delayed their wire rod bookings. Another reason for this postponement is the weakening of the euro against the US dollar, with the exchange rate declining to 1.37. Turkish wire rod buyers, consequently, prefer to also assess wire rod imports offers from southern Europe, in order to use the advantage of the low exchange rate.
In the Italian domestic market this week, mesh quality wire rod offers stand at €530-535/mt ($731-738/mt) for deliveries to customer, while export offers for the same product are at €525-530/mt ($725-731/mt) FOB, for shipments in late September and October.
Last week, Spanish mesh quality wire rod export transactions have been concluded at €520-525/mt ($718-725/mt) FOB. However, SteelOrbis has learned from market sources that following the weakening of the euro, Spanish mills may try to increase their prices by €10-15/mt.
In the Bulgarian domestic long steel market, stockists' mesh quality wire rod prices have remained unchanged as compared to last week at BGN 1,060-1,065/mt ($753-756/mt) CPT on actual weight basis, exclusive of 20 percent VAT.
If the situation in the global economy gain clarity in the coming days, international wire rod buyers, who are currently facing financial difficulties, may return to the market again.