While most spot prices continue to fall in the bottom end of the range, no major drops have been reported in the last week in the US wire rod market.
Weak demand and tight production continue to support a delicate balance in US domestic wire rod pricing--the current spot range has not changed from last week's $36.75-$37.75 cwt. ($810-$832/mt or $735-$755/nt) ex-Midwest mill spot price range, and even though some prices are reported slightly below, the frequency of such deals has not increased. While US mills have been rather successful so far in not letting spot prices falter, sources say their grasp will probably loosen by next month if yet another sideways shredded scrap move comes to pass.
No change in import wire rod offers to the US has also helped US mills, as buyers are reluctant to order for shipments a few months down the line when the margin between import and domestic offers is so narrow. The current offer range from both Turkey and Spain is still in the range of $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) DDP loaded truck in US Gulf ports, and traders tell SteelOrbis that Turkish mills at least are not inclined to strike any deals. Wire rod offers from Spain, on the other hand, might increase as early as next week, as a slight boost in the euro/dollar exchange rate has put Spanish wire rod prices on an uptrend this week.
While the current disinterest in overseas wire rod will most likely affect import tonnage levels in Q4, levels for the greater part of September have not been as low as many thought. As of September 27, the US has imported 51,345 mt of wire rod, about 20 percent less than the 64,143 mt imported in August (according to license data from the US Steel Import Monitoring and Analysis System). A downtrend was certainly expected, but sources tell SteelOrbis that September levels were thought to end up closer to half that of August, mostly due to a lack of interest in Turkish wire rod a few months ago. Therefore, it's not entirely a surprise that Turkey has not posted any tonnage into the US so far in September, while Japan was the source of an impressive 11,961 mt so far this month (compared to August's 5,993 mt), Spain brought in 3,985 mt after no tonnage in August, and Canada dropped from 31,698 in August to 22,947 so far in September.