The increasing trend of wire rod prices in the Turkish domestic market has continued this week. Following the recent US Federal Reserve decision to buy treasury bonds totaling $600 billion up to the end of Q2 2011, the dollar exchange rate has started to be reshaped in most emerging countries, including Turkey. As a result, the US dollar/Turkish lira exchange rate has been in the 1.40s as of yesterday and the US dollar has softened against several currencies. This creates the possibility that wire rod prices in the Turkish domestic market may be reshaped in the coming days.
In the Izmir region, the tight supply situation has this week gained some relief, with delayed orders starting to be delivered. However, the situation is still causing buyers in this region to continue buying from surrounding regions in order to compensate for problems with deliveries. This week, domestic high carbon wire rod supplies are reported by market insiders to be experiencing certain availability problems.
As for the Turkish export market, US buyers are still waiting to decide on new purchases until US domestic scrap prices acquire clearer shape.
Spanish producers are not very precise in offering for export due to the strength of scrap prices in their domestic market. For mesh making grade wire rods, levels of €440-445/mt FOB continue to be offered this week. Furthermore, buyers in the UK seeking to conclude small tonnage imports are heard to be negotiating with southern European producers. Following the recent announcements by the US Federal Reserve, the euro/dollar exchange rate at 1.42 gives Turkey an advantage in wire rod export offers to North Africa.
In Greece, domestic demand is slow and buyers are not so willing to book new tonnages. Similarly, the domestic market in Romania is slow. Domestic producers in Romania have announced a price drop for November and consequently buyers in the domestic market are hesitant about new bookings for now due to concerns that prices may fall further.