Conditions continue to be slow for the US wire rod market. On the bright side, prices are no longer falling, but at the same time, there is hardly any sales activity taking place at all.
Sources say that domestic mills are not getting any big volume orders, but have no immediate plans to cut prices as it seems unlikely that taking down the market further would generate any new orders. Quite simply, buyers continue to wait on the sidelines as fears of further weakening in the economy still dominate the market mentality.
On the domestic side, most low carbon offers continue to range from approximately $32.00 cwt. to $33.00 cwt. ($705 /mt to $728 /mt or $640 /nt to $660 /nt) FOB mill; however, it remains to be the case that special deals at under this range may be conducted on a case-by-case basis for larger buyers.
Meanwhile import offers from Turkey are still ranging from about $26.25 cwt. to $27.25 cwt. ($579 /mt to $601 /mt or $525 /nt to $545 /nt) duty-paid, FOB loaded truck in US Gulf ports. It is also the case with imports, though, that big orders can be negotiated down, and mills, while not keen on officially lowering prices, are willing to entertain any large volume proposition at lower prices.
As regards Chinese mills, there are still no competitive offers for the US market. Chinese mills are on vacation this week for the Lunar Holiday and have expectations that overall market conditions will improve when they return. However, given the global economic problems, whether steel products in any market will post a major rebound remains highly uncertain.
Generally, the import market is very quiet right now, and traders say that there are still a fair amount of inventories at Gulf-area ports.
Due to the overall lack of activity in the market, the price trend for both domestic and import wire rod continues to be neutral, since, with the economy, not price, being the foremost issue keeping buyers from making purchases, there is not much incentive for producers to slash their numbers.
Preliminary Census Data released Tuesday by the US Department of Commerce show that in December 2008 wire rod imports to the US totaled 93,299 mt, which represents a slight decrease from the 96,663 mt imported in November 2008, though it is a significant increase from the 63,973 mt imported in December 2007. In December 2008, the US' top import wire rod sources were: Turkey, at 35,221 mt; followed by Canada, at 19,810 mt; Brazil, at 8,473 mt; Japan, at 8,248 mt; and China, at 4,819 mt.