In the international wire rod markets, the recent price softening in scrap offers to Turkey, as well as buyers' anticipation of a decline in wire rod prices, have led wire rod transaction activity to slow down this week. Taking into account the possibility of a further softening in scrap prices, and eventually a likely drop in wire rod prices, buyers now prefer to wait.
In the Turkish wire rod market, the stagnancy that emerged in the middle of last week still prevails. And this situation is also being felt in sales of final products (steel mesh, wire and nail). In the meantime, final product manufacturers have been experiencing difficulties in receiving the wire rod orders which they had booked previously at cheaper levels. And this situation poses problems for some final product manufacturers in their production operations. As SteelOrbis previously reported, in Turkey's Iskenderun region, wire rod sales, which had been closed since January 12, reopened again yesterday at the level of $760-765/mt.
Wire rod buyers in Turkey have found opportunities to assess a variety of supply alternatives, as all wire rod market players have returned to the market again after a long interval due to the holidays. However, taking into account longer delivery terms and freight costs, final product (steel mesh, wire, nail) manufacturers in Turkey have continued to prefer the domestic market for their wire rod purchases.
In southern Europe, the impact of strong scrap prices has continued to be felt in the regional wire rod market. In particular, Spanish wire rod producers have had difficulties in obtaining supplies of suitable scrap grades for the production of drawing quality wire rod. This causes export offers from Spanish wire rod producers to remain higher in the international market. Although Spanish mills' mesh quality wire rod export offers stand at €550-560/mt ($743-756/mt), buyers are reported to be leaning torward the lower end of this price range, SteelOrbis understands from market sources.
Recently, the US dollar has reached 1.35 against the euro. Depending on the outcome of the ongoing US-China summit in the US, the dollar is foreseen to strengthen against the euro. If this happens, especially as regards wire rod transactions to North Africa, European wire rod suppliers would gain a more advantageous position as compared to Turkish suppliers.
On the other hand, the political disturbances in Tunisia have been causing problems in the wire rod and final product (steel mesh, wire, nail) trade to this country. This week, Libya and Algeria have stood out as the most lively wire rod markets in the North Africa.
In the meantime, the Syrian market is still active for final product manufacturers in Turkey's Iskenderun region. However, the main problem here is that Syrian buyers are placing very low counter offers against the wire rod export offers given to this market.
€1 = $1.35