The pricing trend for domestic
wire rod is still slightly up, as the announced August price increases from domestic mills are expected to go into effect next week.
However, at this point, many market-watchers are not sure if low carbon will go up at all. The market for high carbon is less prone to import competition, and it's more likely that the high carbon producers will be able to push most of the announced increases through. The low carbon market, however, is not very strong, as domestic low carbon has to compete with softening Chinese and Turkish prices.
This week, domestic
wire rod offers in the market still range from $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB mill for low carbon, and from $29.50 cwt. to $31.50 cwt. ($650 /mt to $694 /mt or $590 /nt to $630 /nt) FOB mill for high carbon.
On the domestic supply side, the United Steel Worker (USW) employees at Gerdau Ameristeel's
wire rod plant in New
Jersey are still working, despite the fact that their contract expired July 19. As USW spokesperson Gerald Dickey told SteelOrbis today, the company has allowed the workers to continue working under the same terms of the old contract for now. Therefore, this labor issue should not affect the domestic
wire rod supply. However, Gerdau Ameristeel's extension of the contract has a provision that the company can terminate the extension with seventy-two hours notice. This means that a full-fledged lockout could still happen. As for now, the union and the company are in talks to reach a new contract.
According to another source close to the company, returning workers at the Beaumont plant are actually earning more compensation due to Gerdau Ameristeel's various merit and performance rewarding programs, despite working without a labor contract for over six months. As the workers are happy even without a contract, the chances of a major supply interruption are looking remote.
In the meantime, the Sicartsa strike continues, although some hefty Chinese rod shipments have recently arrived, relieving the immediate pressure in Mexican market. We expect less Caribbean, US and South American
wire rod shipments to be diverted to
Mexico.
In general, import
wire rod pricing still has a slightly downward pricing trend, though mesh quality rod offers have not deteriorated further since last week.
Mesh grade import offers in the market still range from $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) FOB, loaded-truck, in US Gulf, and industrial quality (drawing)
wire is still ranging from $25.75 cwt. to $26.75 cwt. ($568 /mt to $590 /mt or $515 /nt to $535 /nt) FOB, loaded-truck, in US Gulf ports.