Wire and wire mesh prices in the US continue to trend upwards along with the rising cost of wire rod.
Wire and mesh prices have increased tremendously this year, with wire drawers announcing price increases every month, sometimes twice in one month, to make up for the rising raw material costs.
In May alone, some wire drawers increased their prices by as much as $300 /nt ($331 /mt or $15.00 cwt.) -- Heico-owned Davis Wire raised their prices by $150 /nt ($165 /mt or $7.50 cwt.) on May 1 and by an additional $150 /nt, effective on May 15, for a total increase of $300 /nt in May. Meanwhile, ArcelorMittal raised their wire product prices by $150 /nt, effective April 26 (rescinding a previously announced increase of $80 /nt), followed by another increase of $125 /nt ($138 /mt or $6.25 cwt.) in May, making for a total $275 /nt ($303 /mt or $13.75 cwt.) increase for late April/May. All in all, domestic wire prices in the US have risen by as much as $600 /nt ($661 /mt or $30.00 cwt.) in the first five months of 2008.
With domestic mills expected to raise their rod prices by at least another $50 /nt to $60 /nt ($55 /mt to $66 /mt or $2.50 cwt. to $3.00 cwt.) in June, wire prices will undoubtedly rise accordingly. Currently, most wire drawers are still waiting to see what June wire rod prices will be before they set their own June prices.
General market conditions for wire remain tight; despite the slow end-use business resulting from the housing slump, rod supplies are slim because of the import rod slowdown as well as the reduced amount of tonnage available from domestic mills, most of which have cut back on production. Domestic rod customers are seeing very long lead times and continually rising prices because of the increases in scrap costs. Also, there are no cheaper import alternatives to turn to, since import rod prices are even higher than domestic prices. As a result, wire drawers must continue to raise their numbers as long as their raw material costs keep increasing. Wire customers have no choice but to accept the domestic increases since import wire is no longer a cheap option either.
There is some concern that, as these costs are pushed further along downstream, the end-user will finally say "enough is enough" and start to look for alternatives to buying domestic wire. Although import wire is no longer readily available at competitive prices, downstream wire product imports can be a cheaper alternative to buying the raw materials domestically.
Domestic wire and downstream companies are aware of this and have in some cases brought their concerns to the US government -- There are currently several antidumping cases against downstream wire products from China going through the legislative circuit, including the cases against wire hangers, threaded rod, and nails. Preliminary dumping determinations favoring the petitioners in the wire hanger and nail cases were released earlier this year, with the DOC's final determinations in these cases both expected in June. The threaded rod investigation is still underway, with the preliminary antidumping determination expected to be made by the DOC in August. If these cases are successful (and it looks as if they probably will be), we may start to see more of these filings against other fabricated wire product imports.
On the wire mesh side, rolls of 10-gauge building mesh are currently going for approximately $84 to $85 per roll, up $12 to $13 from last month's level. Producers are aiming for prices even higher than the current range -- of around $89 per roll. Market prices have not moved up quite to this level yet, though they likely will in the coming weeks. As with the rest of the housing-related wire products, mesh is not particularly strong right now, but prices are expected to continue trending up as long as raw material costs are on the rise.