The US wire rod market continues to lose steam, with domestic offering prices dropping by approximately $0.50 cwt. ($11 /mt or $10 /nt) in the past few weeks. Most domestic low carbon offers on the market now range from $27.50 cwt. to $28.50 cwt. ($606 /mt to $628 /mt or $550 /nt to $570 /nt) FOB mill, while high carbon offers range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB mill. Even after this latest price drop, sources say that the pricing trend is still down because of continuing fallout from the weak demand. However, the slight uptrend in US scrap prices may help keep domestic rod prices from getting too low before bottoming out.
On the import side of the market, things are very quiet, and new bookings are rare. Import prices are now higher than domestic prices in most cases, and while US rod buyers are reluctant to stop import buying entirely, import sales are very slow. Still, Chinese mills have not lowered prices to generate more interest from US customers. In fact, there is a rumor that the Chinese government will increase the export tax for wire rods by another notch as of September 1, which would make it even more difficult for the Chinese rod mills to export to the US for a profit.
The Chinese domestic rod market is currently decent, so the mills are not as hungry for US business for the time being. However, sources say that despite the VAT cancellation and possible export tax increase, China is not ready to give up on the US market just yet since it is one of their largest markets. Time will tell whether or not government restrictions will allow Chinese producers to continue making money from rod sales to the US, or if the costs to do so will be too high. Besides the Chinese rod imports, Turkish rod offers are also available, though they are not at all competitive compared to the Chinese offers or domestic offers.
Though the European market is slow due to the summer holiday, Turkey's domestic long product markets are strengthening, giving Turkish producers little incentive to lower prices for US customers. Import wire rod offers for the US have remained stable since last week, with most mesh grade wire rod offers ranging 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 ranging 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.