Stabilizing import prices have little impact on US wire rod market

Wednesday, 03 August 2011 02:35:34 (GMT+3)   |  
       

After two weeks of price increases, import wire rod offers from Turkey have stabilized--but US buyers are still focusing on what this month will bring for domestic prices.

Over the last week, Turkish mills seemed to realize that rising wire rod import offers to the US during a weak US market were doing them no favors, and as such, import offers have neutralized this week, remaining in the range of $38.50-$39.50 cwt. ($849-$871/mt or $770-$790/nt) DDP loaded truck in US Gulf ports.  Furthermore, there is a strong indication that Turkish offers may soften a bit in the coming weeks, especially if US domestic mills cave to the pressures of a sideways scrap move.

Even though US wire rod mills failed to get even a penny of their price increase announced for July shipments, they are not exactly willing to admit defeat--according to sources, there is a possibility that mills will drop asking prices for September shipments, but if they do, it will be taken off the July increase.  That means on paper, official asking prices for September could be closer to June levels, but actual spot prices will probably soften a bit from current levels, depending on how flexible each mill is willing to be. 

Alternately, some sources suggest that the same denial that resulted in mills keeping August shipment prices level when the July increase flopped will result in no official change in prices for September, although customers will be able to use the neutral raw material pricing and weak demand levels to soften the spot market anyway.

Either way, it's not entirely clear how much customers will be able to chip away from the current US domestic spot price range of $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) ex-Midwest mill, but guesses in the range of $0.50-$1.00 cwt. ($11-$22/mt or $10-$20/nt) are not entirely unrealistic.


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