Although import competition is scarce and scrap prices are rising, US wire rod prices continue to trend down because of the continued weak business.
Prices have not decreased in the last week, but the weak demand and relatively high inventories will likely cause domestic numbers to fall further. Even though lowering prices will not necessarily generate new business, rod producers are getting desperate to fill their order books.
On the bright side for domestic mills, now that domestic wire rod prices are lower than imports, wire rod buyers in the US may "get hooked" on domestic steel again, with US mills regaining some of the market share they've lost in recent years.
After decreasing by $10 /nt ($11 /mt or $0.50 cwt.) in early August, domestic wire rod offering prices have remained stable in the last week with low carbon offers on the market ranging from $27.50 cwt. to $28.50 cwt. ($606 /mt to $628 /mt or $550 /nt to $570 /nt) FOB mill, and high carbon offers ranging from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB mill.
Meanwhile, Chinese wire rod offering prices continue to rise, though no offers have been fixed at the current asking prices. There are still no indications that import numbers will come down anytime soon, with the Chinese local and Middle Eastern longs markets going relatively strong. Also, while there has been no official announcement, the rumor is still circulating that China's government will increase the export tax for wire rods as of September 1, which would result in Chinese offering prices rising even further.
A wire rod trader told SteelOrbis this week, "With hardly any import sales to speak of, traders are having an increasingly difficult and desperate time."
For now, completed import offers of mesh grade wire rods still range from $28.25 cwt. to $29.25 cwt. ($623 /mt to $645 /mt or $565 /nt to $585 /nt) FOB, loaded truck, in US Gulf ports, and import offers for drawing quality rods range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB, loaded truck, in US Gulf ports. Prices are slightly higher in the East and West Coast, by approximately $0.50 cwt.