US domestic wire rod prices haven't moved in the past week, and despite rumblings of an August price increase, the mills haven't yet announced any price hikes due to the slow market conditions.
Some mills' backlog reportedly does not exceed four to six weeks, as business from wire drawers is very soft.
The pricing trend is neutral for the time being since the VAT rebate reduction and export tax for Chinese wire rods haven't yet had a big enough impact on the US market to counteract the weak domestic demand.
Domestic low carbon wire rod offers on the market continue to range from $29.00 cwt. to $30.00 cwt. ($640 /mt to $661 /mt or $580 /nt to $600 /nt) FOB mill. High carbon offers still range from $31.50 cwt. to $32.50 cwt. ($694 /mt to $717 /mt or $630 /nt to $650 /nt) FOB mill.
Chinese mills are attempting to raise prices but haven't been able to find acceptance in the US because of the lack of demand. Still, the pricing trend is up as some of the increases from the export tax are expected to go through eventually. Also, there are new rumors that the export tax will go up again by another five percent on October 1. If this happens, import prices will find a higher pricing level in the long run as business improves.
However, since the export tax was announced, import prices still haven't really gone up. Chinese mills are not having any success passing along their higher numbers to the US, and China's domestic wire rod prices are now decreasing since exports have slowed down with the result that their market is becoming saturated with the excess tonnage. This may be an indication that China will eventually lower their asking prices to a more manageable price increase.
Import offers on the market for mesh grade wire rod continue to range from $28.25 cwt. to $29.25 cwt. ($623 /mt to $645 /mt or $565 /nt to $585 /nt) FOB, loaded truck, in US Gulf ports, while import offers for drawing quality rods still range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB, loaded truck, in US Gulf ports.
Import offers are still too close to domestic prices, or for certain wire rod buyers even higher priced than domestic wire rod. Therefore, hardly any import transaction has materialized. 2007 is shaping up to be an extremely weak year as far as imports are concerned.