Apparent consumption in the Italian wire rod market is slowing and this is certain to have its consequences. Mesh quality wire rod is now experiencing a weaker demand that has caused quotations to lose at least €40/mt ($54/mt) within a one-month period. Currently, the mesh quality wire rod price in the national market is around €480/mt ($648/mt) ex-factory. Drawing quality wire rod, on the other hand, is being quoted in a range of €500-510/mt ($675-688/mt).
Mesh quality wire rod imported from China has experienced a surge in quotation levels due to the reduction of the VAT rebate from April 15 (previously at eight percent), to which was added the change in customs duty (+10 percent). These elements of official policy have caused quotations to rise from €430/mt ($581/mt) a month ago to a current level of €480/mt ($648/mt).
Summing up, there has been an eclipse of the price difference between the Italian product and the imported product. Nevertheless, the impact of Chinese imports is being felt in the current period because wire rod is now arriving from China which had been ordered back in February at prices considerably lower than present levels.
Another element which must be kept in mind are logistics, especially with the rise seen in freight charges and the consequences of ports overburdened with steel cargoes - a typically Italian factor - as regards costs and delays in deliveries.