Officially, US wire rod prices have remained stable over the past week; however, domestic producers are reportedly still striking special deals for substantial orders.
Aside from the discounted offers for major buyers, such as mesh makers, most domestic low carbon wire rod offers on the market continue to range from $29.00 cwt. to $30.00 cwt. ($640 /mt to $661 /mt or $580 /nt to $600 /nt) FOB mill. High carbon offers still range from $31.50 cwt. to $32.50 cwt. ($694 /mt to $717 /mt or $630 /nt to $650 /nt) FOB mill. The pricing trend is neutral for the time being, with no major changes expected to be seen in the coming weeks.
While mills would love to raise prices, they don't dare to do so since they are already having a hard time generating new orders. On top of weak demand from the wire and end-user markets, there has recently been an increase of downstream wire product imports to the US, resulting from the elimination of the Chinese VAT rebate for wire rod exports and the subsequent introduction of a 10 percent export tax on wire rods. However, this picture might change soon, since the most common wire grades are now subject to a five percent export tax as well and VAT rebates for a host of wire products (a.o. pc strand, wire cloth, nails, barbed wire, chains and fasteners) have been cut back to five percent as of July 1.
Import wire rod prices have remained flat since last week, though there have been some lower priced offers floating around for tonnage already in the US that was purchased at an earlier date. For new offers, mesh grade wire rod import offers on the market continue to range from $28.25 cwt. to $29.25 cwt. ($623 /mt to $645 /mt or $565 /nt to $585 /nt) FOB, loaded truck, in US Gulf ports, while import offers for drawing quality rods still range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB, loaded truck, in US Gulf ports.
The overall pricing trend for import wire rod is still neutral, as the slow demand doesn't seem to be resulting in lower import wire rod prices for the US. It remains to be seen how long Chinese mills will hold the line on their higher prices, since, as we mentioned last week, Chinese domestic wire rod prices are very soft due to increased domestic availability resulting from the export tax. Currently, the Chinese mills are choosing to sell more tonnage to their home market rather than face exports with the onerous export tax.