Import wire rod prices for the US have come down another notch in the last week, based on the slow demand conditions in the US.
Traders have lowered their numbers for Chinese boron-added rods by approximately $1.00 cwt. ($22 /mt or $20 /nt) in the last week, to a range of $54.00 cwt. to $55.00 cwt. ($1,191 /mt to $1,213 /mt or $1,080 /nt to $1,100 /nt) FOB loaded truck in US Gulf ports.
The pricing trend for import rod is still down, as Chinese mills are expected to lower their prices for traders as well. There has been a lack of new offers from Chinese mills in the last week due to the Olympics; however, prior to that, mills were willing to negotiate prices due to their slow domestic demand.
With China's domestic rod prices trending downwards, due in part to projects being put on hold because of the Olympics, and slow demand from the US, it is likely that when the mills return to the market they will lower their offering prices for the US further.
Other foreign sources are "feeling out" the US rod market but finding that the accepted price level is still below that at which they wish to sell their rods. However, with the wire rod market slowing not only in the US, but also internationally, there is a good chance that these import offers will continue to come down until they are low enough for US customers to start biting.
On the domestic side, US mills have not lowered their prices yet but are not booking much either. Mills are full through September and have not asked for October bookings yet. An official price decrease is not likely to be announced, though with the market slowdown, there is not a great chance that mills will be able to get the same prices they were getting for September booking.
Wire drawers say that inventory levels are sufficient, and with the falling import prices as well as the recent decrease in scrap prices, there will be a lot of pressure on mills to lower their prices, at least in the form of making deals with certain customers or maybe lowering/eliminating the extra for 5.5mm (7/32 in.).
Demand is also a major issue - though it has been slow for at least several months, it has gotten particularly weak now that we are in the summer doldrums, a time when steel buying and construction work typically stalls. In addition, earlier in the year, the slow rod demand was offset by the lack of imports and rising raw material prices, but now both of those trends have turned around. Though supplies are still somewhat tight, they are not as tight as they were a few months ago. Also, rebar producers announced a $30 /nt ($33 /mt or $1.50 cwt.) price decrease recently, and this could spill over to wire rods as well (though wire rod producers never announce price decreases officially).
For now, domestic prices continue to range from $56.00 cwt. to $57.00 cwt. ($1,235 /mt to $1,257 /mt or $1,120 /nt to $1,140 /nt) FOB mill, with an extra of $20 /nt ($22 /mt or $1.00 cwt.) for 5.5 mm (7/32-inch) rods. High carbon rods range from $58.50 cwt. to $59.50 cwt. ($1,290 /mt to $1,312 /mt or $1,170 /nt to $1,190 /nt) FOB mill. The pricing trend for domestic rods is slightly down.