In the international wire rod markets, transaction activity has remained sluggish as buyers have this week continued to anticipate a decline in wire rod prices in the short term.
As indicated in our previous report, Spanish wire rod producers had difficulties in obtaining supplies of suitable scrap grades for the production of drawing quality wire rod. And this week, also due to problems relating to scrap supplies, this time Italian wire rod producers were forced to delay domestic wire rod deliveries, causing increased concerns on the local buyers' side.
As regards Turkey's wire rod exports, with Middle Eastern buyers having increased their wire rod inventories to certain levels, Turkish wire rod exporters have headed to Africa. In West Africa, Nigeria and Senegal have recently stepped forward among Turkey's key wire rod export markets. However, Nigerian buyers have continued to buy wire rod only to meet their needs. Comparing wire rod export volumes to these countries with the capacity of the US market, where buyers have been adopting a wait-and-see stance for a while, it seems unlikely that Turkish wire rod producers will achieve their desired export volumes in these markets, given their increased output capacities.
In North Africa, the political turmoil which started in Tunisia has spread to Algeria, Yemen and now to Egypt, also influencing these local markets. SteelOrbis has learned that in Egypt trading companies have been facing difficulties in answering price inquiries due to price fluctuations in the international wire rod markets.
This week, following Turkish offers to Libya for mesh quality wire rod to be delivered in February at $735/mt CFR, buyers are expected to submit their answers to these offers.
In the recent period, Russia has stood out among the CIS markets with its recently started construction projects. While Russian buyers may supply their wire rod needs from the domestic market, construction companies may also assess alternative wire rod import offers.