Domestic
wire rod prices have increased by approximately $1.50 cwt. ($33 /mt or $30 /nt) in the past week, reflecting the price increase announced by Gerdau Ameristeel last week for March shipments. This increase is widely expected to gain market acceptance.
Buyers report that they are not yet paying these higher prices, but that they will have to in the near future as the cheaper offers on the market start to disappear. The recent shredded
scrap price increase along with the strengthening rod market insures that the $30 /nt increase will indeed go through. Market players speculate that domestic rod mills may announce another price increase for April shipments.
Domestic low carbon rod prices now range from $26.00 cwt. to $27.00 cwt. ($573 /mt to $595 /mt or $520 /nt to $540 /nt) FOB mill, while high carbon prices range from $28.50 cwt. to $29.50 cwt. ($628 /mt to $650 /mt or $570 /nt to $590 /nt) FOB mill.
In view of the continuing increases in raw material prices, the pricing trend for domestic
wire rod is still up. Also, there has been some relief from imports, as fewer shipments are coming in and import prices are going up.
Insiders say that there are very few new offers from
China, as most Chinese
wire rod mills are waiting until after the Chinese New Year to resume business. Due to the lack of import shipments as well as the Chinese government's expected cutback of the VAT rebate on long products, the pricing trend is still strongly up, and offering prices to the US have increased by approximately $0.75 cwt. ($16.50 /mt or $15 /nt) in the last week.
Import
wire rod offers to the US now range from $24.75 cwt. to $25.75 cwt. ($546 /mt to $568 /mt or $495 /nt to $515 /nt) FOB, loaded truck, in US Gulf ports for mesh grade, and from $26.25 cwt. to $27.25 cwt. ($579 /mt to $601 /mt or $525 /nt to $545 /nt) FOB, loaded truck, in US Gulf ports, for drawing quality. The once-available bargain deals from Chinese mills for Chinese grades and for sizes 6.5 mm and larger seem to have vanished, helping the import
wire rod market to increase prices in general.
License data from the
US Steel Import Monitor show that for the month of January 2007, the top five exporters of
wire rod to the US were:
China at 109,053 mt,
Canada at 29,463 mt,
Brazil at 13,290 mt,
Japan at 7,979 mt, and
Trinidad & Tobago at 5,803 mt. A total of 185,205 mt of
wire rod was imported to the US during the month of January 2007, compared to 152,748 mt in December 2006 and a whopping 356,300 mt in January 2006 (census data).