Wire rod prices still climb up in Turkish domestic market

In this week's Turkish domestic market, the rise of mesh quality wire rod prices to $810-835/mt + VAT ex-works has caused panic among buyers. Following price hikes of up to $50-55/mt registered early this week as compared to the previous week, the price increase rate slowed down by the middle of the week. While some wire rod buyers have delayed their purchases amid the continuous steel price increases, others still continue their bookings as they need to ship their final product orders in time. It is thought that manufacturers will face difficulties in reflecting these steep price hikes in their own final product sales prices.
 
The increased activity on construction projects ahead of the general election which will be held on June 12 and buyers' plans to start June with higher inventories have contributed to the wire rod price increases in the Turkish domestic market.
 
As SteelOrbis previously reported, a major steel producer in Turkey's Iskenderun region has decided to postpone planned maintenance works at its wire rod production line from early June to mid-June, due to intensive demand and high prices. The approach of a recently announced strike is also expected to affect the producer's maintenance plans.
 
In the meantime, SteelOrbis has learned from market sources that, due to the ongoing supply shortages in the Iskenderun region, wire rod deliveries and shipments to this region from Turkey's other regions have lately accelerated. On the other hand, this week's price increase in Turkey's Aegean region has also raised the concerns of buyers.
 
Following the rapid price increases in the Turkish domestic wire rod market, market operators have now turned to import offers, particularly to Europe and the CIS with the recent weakening of the euro against the US dollar (down to 1.43).
 
As wire rod export offers for July shipments are now being decided and also due to the national holiday in Italy, wire rod export offers are expected to gain clearer shape next week. As of late May, Ukrainian low carbon wire rod offers were standing at $740-750/mt FOB for shipments in late June, while ex-Italy mesh quality wire rod offers were at €520-530/mt ($748-763/mt) FOB.
 
SteelOrbis has been informed that Italian buyers have been showing reluctance vis-à-vis traders' Turkish origin mesh quality wire rod offers at €530-535/mt ($763-770/mt) CFR. Turkish mills have pushed up their wire rod export offers to $770-780/mt FOB and even higher this week, surprising buyers and traders. It is very difficult for Turkish mills to conclude transactions at these increased levels for the time being, and it is thought that it will take some time for the international markets to come to terms with these price levels.