Wednesday, 13 February 2008 09:38:57 (GMT+2) -
Following ArcelorMittal's $50 /nt ($55 /mt or $2.50 cwt.) price increase announcement last week, other major wire rod mills in the US and Canada have followed suit and have also upped their prices for March deliveries.
February's $50 /nt increase has gone through fully and now the question is to what extent this next increase will be accepted in the market. It is too early to tell if the full increase will stick, but domestic mills are trying very hard to push the whole increase through. Although wire demand is still not great, the weak import competition is enough reason for mills to warrant their increases.
Right now, wire rod prices are still at the same level as reported last week; however, the pricing trend is strongly up as buyers believe that some if not all of this March increase will go through. Moreover, the tons are tight and more increases are highly likely for April and May shipments.
Domestic low carbon rod offers still range from $35.00 cwt. to $36.00 cwt. ($772 /mt to $794 /mt or $700 /nt to $720 /nt) FOB mill, while high carbon offers range from $37.50 cwt. to $39.50 cwt. ($827 /mt to $871 /mt or $750 /nt to $790 /nt) FOB mill.
Wire drawers are not too happy with these big increases in the market as they find them hard to push through to their customers. In their discussions with wire companies during the American Wire Producers Association's annual meeting in Carlsbad, California, the wire rod mills have been sympathetic to their customers' outcries, but say that they are also faced with high raw material costs.
Wire drawers have been raising their wire prices as well but not as fast as the rod prices are going up. However, these fast and furious rod increases do not leave much room in their margins and they are expected to make corresponding increases shortly. However, they are worried they may lose some market share to substitute products such as plastics and wood. Still, it is obvious that the wire companies will need to effectively manage their profit margins despite a lower tonnage output.
On the import side of the wire rod market, prices have remained at the same levels as last week; however, there is pressure on Turkish mills to up their prices again. Import mesh quality wire rod offers still range from $37.50 cwt. to $38.50 cwt. ($827 /mt to $849 /mt or $750 /nt to $770 /nt) FOB, loaded truck, in US Gulf ports, while drawing quality offers range from $39.25 cwt. to $40.25 cwt. ($865 /mt to $887 /mt or $785 /nt to $805 /nt) FOB, loaded truck, in US Gulf ports.
The import pricing trend is strongly up; however, US wire drawers are resisting the higher pricing levels, perhaps waiting to see how much the domestic rod prices will eventually increase. Turkey is currently the only source offering import rod to the US market since European prices are still far above US prices, and China is reluctant to offer to the US as well, which may lead to wire drawers getting hit with higher prices by both domestic and offshore mills. Even though there is no immediate shortage in the market, some wire drawers are already worried about not having enough rods even if they are willing to pay the astronomical prices.
|Most Recent Related Articles|
21 Sep 15
21 Sep 15 | Steel Newswire , longs , USA , China , North America , quotas & duties , trading , San Diego | similar articles
09 Oct 15
09 Oct 15 | Steel Prices & Market Analyseswire rod , longs , Turkey , USA , North America , San Diego | similar articles
05 Oct 15
05 Oct 15 | Steel Prices & Market Analyseswire rod , longs , Turkey , USA , North America , trading , San Diego | similar articles
02 Oct 15
02 Oct 15 | Steel Prices & Market Analyseswire rod , longs , Turkey , USA , North America , San Diego | similar articles
30 Sep 15
30 Sep 15 | Steel Prices & Market Analyseswire rod , longs , Turkey , USA , North America , steelmaking , Istanbul | similar articles