Tuesday, 09 October 2007 12:57:56 (GMT+2) -
Import wire rod offering prices for the US have increased by approximately $0.25/cwt. ($5.50 /mt or $5 /nt) in the past week due to higher asking prices from Chinese mills and strengthening ocean freight rates.
Most import mesh quality rod offers now range from $29.50 cwt. to $30.50 cwt. ($650 /mt to $672 /mt or $590 /nt to $610 /nt) FOB, loaded truck, in US Gulf ports, while drawing quality offers range from $31.25 to $32.25 cwt. ($689 /mt to $711 /mt or $625 /nt to $645 /nt) FOB, loaded truck, in US Gulf ports. Prices are slightly higher on the East and West Coasts, by approximately $0.50 cwt. ($10 /nt or $11 /mt).
Import sales prices are expected to continue trending up due to the corresponding increases seen in Chinese mills' offers for traders. However, very few bookings are taking place.
In contrast to Chinese offers, Turkish offering prices for the US are still trending slightly down due to the quiet Middle East longs market. Still, the high ocean freight rates and stable scrap prices will keep Turkish import offers from decreasing significantly.
Data from the US Import Administration show that during the month of August 2007 wire rod imports to the US totaled 97,868 mt, compared to 140,236 mt imported in July 2007 and to 236,000 mt imported in August 2006. The top import wire rod sources in August were: China, at 36,349 mt; Canada, at 21,406 mt; Brazil, at 15,679 mt; Japan, at 12,137 mt; and Trinidad & Tobago, at 5,410 mt.
Domestically, US wire rod prices remained stable over the past week after rising by approximately $20 /nt ($22 /mt or $1.00 cwt.) in recent weeks. It is expected that these price increases will probably stick, even for the major buyers, as there is no lower-priced import alternative. Still, there are no apparent indications that prices will rise any higher in the near future than the $20 /nt they have already climbed.
A trader told SteelOrbis this week, "The mills want more, but whether or not they get it depends on if and when business gets stronger." He mentioned that more and more domestic rod inventories are visible at US ports, replacing the import inventories that used to be there.
Demand for wire rods in the US is still lackluster, especially for certain downstream markets related to housing, such as the chain link fence market.
Currently, domestic low carbon offers range from $28.50 cwt. to $29.50 cwt. ($628 /mt to $650 /mt or $570 /nt to $590 /nt), while high carbon offers range from $31.00 cwt. to $32.00 cwt. ($683 /mt to $705 /mt or $620 /nt to $640 /nt).
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