Domestic wire rod prices in the US have held firm in the last week, though mills have yet to see an upturn in business.
US wire rod demand remains weak, and inventories are at comfortable levels. Therefore, rod buyers, who have seen a big drop in their wire businesses as well, are generally in no hurry to replenish their stocks, especially if they think prices might come down further. Mills, anticipating some first quarter improvement in demand, continue to hold prices steady and are proceeding to ramp up some idled production. As of yet, however, it is not evident that producers will get enough orders to be able to maintain these prices.
For now, domestic low carbon rod 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. Some insiders speculate that the mills would be willing to do slightly lower deals if they are presented with large enough orders, though that theory is largely untested as few, if any, large orders are being placed.
As for January scrap prices, which many had hoped might bring about some price increases for US long products, the Chicago shredded increase turned out to only be minimal at $8/long ton, certainly not large enough to warrant any price increases and not even large enough to indicate an upward price trend for scrap.
On the import side of the US rod market, prices for new offers have softened slightly since last week as traders are trying to put together some orders to present to the mills.
While traders do not want to take the market down further, the average import rod price for US customers has come down by about $0.50 cwt. ($11 /mt or $10 /nt) due to the ongoing soft demand. But, as one Gulf-area trader put it, "Price is secondary right now. The most important thing is finding buyers who need to place an order."
Turkish mills are also motivated to sell at competitive numbers in order to drum up some business, though not many new orders are being booked. While the market seems to be getting ever-closer to the bottom, the weak demand both in the US and around the world continues to prevent prices from improving despite the massive, industry-wide capacity cutbacks.
Most mesh-grade wire rod imports from Turkey now range from approximately $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. Chinese material is still at uncompetitive price levels.
US import licensing data for December show a decrease in total wire rod imports from November, with Turkish material making up a relatively large quantity of the total compared to previous months of the year, and China accounting for a smaller than usual amount relative to most of the year. Wire rod imports in December totaled 75,007 mt, compared to 96,663 mt in November. The rod imports in December came from Turkey, at 24,832 mt (compared to its 2008 monthly wire rod import average of 10,300 mt); followed by Canada, 18,727 mt; Brazil, 8,473 mt; Japan, 5,093 mt; and China, with 5,093 mt (compared to its 2008 monthly average of 12,000 mt).