The price increase signals which started to be seen in the Turkish wire rod market last weekend have gained density in the current week. Wire rod demand has become more active in the Turkish domestic market as a result of the strong trend of scrap prices and the low wire rod inventories of most wire rod buyers. Turkish producers' limited wire rod supply to local buyers has caused anxiety levels in the market to increase.
Needing to purchase wire rod in order to fill their existing orders (i.e., for steel mesh, nail, wire), wire rod buyers are seeking different solutions given the late arrivals of their previously purchased wire rods and also given the quantity restrictions of wire rod mills as regards new wire rod purchases. In Turkey, as a result of the narrowing price gap between the Iskenderun region and the other regions of the country and the consequent fall in attractiveness of purchases from other regions, wire rod buyers in the Iskenderun region have started seeking alternative solutions. The preparations of some steel mesh producers in the Iskenderun region for steel mesh investments in the Marmara region may be regarded as one of these alternative solutions.
Looking at the southern European markets, despite Italian producers' offers for July shipment, wire rod buyers in Italy are reluctant to increase their inventory levels before the summer holiday period which will start in August. In Portugal, despite the reduction of the Portuguese economy's credit rating by 2 points, final product (steel mesh, wire) sellers in the local market are trying to get through the current economic situation with minimum losses. End-users in Portugal are hesitating to conclude purchases domestically, given the attractive offers of Spanish final product (steel mesh, wire) sellers.
Looking at the Indian wire rod market, although demand has became slightly more active, it is still not possible to say that demand has increased significantly. Due to the high levels of ex-China wire rod export offers lately, buyers in India have started to evaluate ex-CIS offers.
Generally speaking, with the Turkish producers' limited supply for their domestic market and given the overhauling works that will start next week in the Iskenderun region, it will become clearer next week whether buyers in this region will decide to conclude purchases from other regions in Turkey. Wire rod prices are expected to become more settled depending on the response of international wire rod buyers to the price increases in Turkey.