Import wire rod prices in the US have increased by $40 /nt ($44 /mt or $2.00 cwt.) in the last week due to the rallying markets worldwide.
With global scrap, billet, and longs prices moving up in a hurry, import mills continue to raise their rod prices for the US, and traders are raising their prices in turn. As a result, spot prices have now reached the following levels. Import mesh quality rod now ranges from $43.50 cwt. to $44.50 cwt. ($959 /mt to $981 /mt or $870 /nt to $890 /nt) FOB loaded truck, in US Gulf ports, while import drawing quality rod offers range from $45.25 cwt. to $46.25 cwt. ($998 /mt to $1,020 /mt or $905 /nt to $925 /nt) FOB loaded truck, in US Gulf ports for June arrivals.
The pricing trend for import rod is still pointing upwards, as mills in Turkey and Germany continue to raise their asking prices in response to rising raw material costs, their strong home markets and the acceptance that their offers are finding in the US as well. Import rod has reached such a high price level that even the Chinese mills are thinking about re-entering the US market.
Total import rod arrivals remain low, especially when excluding intra-NAFTA trade. Final import license data from the US Import Administration show that in February 2008 rod imports totaled 77,124 mt (compared to 96,057 mt in February 2007), with most tonnage coming from Canada, which supplied 37,925 mt. Other main sources in February include Brazil, at 17,455 mt; Japan, at 9,573 mt; Trinidad & Tobago, at 5,602 mt; and South Korea, with 3,831 mt.
Tight market conditions in the US rod market prevail, as wire drawers are having problems meeting their rod needs since imports remain so scarce and domestic mills are only offering a limited amount of tons.
Domestic mills have been able to achieve all of their announced price increases this year, but domestic numbers still haven't caught up with the import level. In fact, the gap is widening. Low carbon rod offers from domestic mills range from $39.50 cwt. to $40.50 cwt. ($871 /mt to $893 /mt or $790 /nt to $810 /nt) FOB mill, while high carbon offers range from $42.00 cwt. to $43.00 cwt. ($926 /mt to $948 /mt or $840 /nt to $860 /nt) FOB mill, and mesh offers range from $38.50 cwt. to $39.50 cwt. ($849 /mt to $871 /mt or $770 /nt to $790 /nt) FOB mill.
The pricing trend on the domestic side is also up, since even though end-use demand remains flat, due to the tight availability of rods, domestic mills can essentially name their price and customers will pay. No major domestic price hikes are in the immediate future, but it is expected that domestic mills will try to continue raising their prices this spring until they are at or just under the import price level -- That is, assuming that the US' already troublesome economic figures don't take an even sharper turn for the worse.