After substantial AD/CVD margins were levied against 10 sources of import US wire rod within the last year, other import sources have stepped up to take advantage of the “wide-open market share,” as one source called it. Still, wire rod import tonnage levels in 2017 struggled to keep up with past averages, especially in the fourth quarter when several final AD/CVD results were announced. And the latest news from the US DOC indicates a further narrowing of import competition, now that Nucor has petitioned for a wider scope in the existing AD/CVD order against Mexican wire rod, specifically from Deacero.
Mexican wire rod imports trended steady in 2017 with relatively low tonnage numbers, reached a high of 6,088 mt in March. The latest US import census data show a total of 2,381 mt of wire rod from Mexico in December and import permits totaling only 537.2 mt in January and 1,841 mt in the first week of February. Sources say they’re not sure why Nucor is going after Deacero when their import levels are barely affecting the US domestic wire rod market, but knocking another import source out of the market is expected to benefit other import sources such as Germany and Brazil more than US domestic mills.
Either way, demand for wire rod in the US continues to trend steady, but not as strong as other long products such as rebar. And while US domestic wire rod mills are continuing to push for higher prices, full absorption of the most recent price increases (effective Feb. 1 and Feb. 9) is not guaranteed, leaving traders focused on keeping an “attractive margin” between their offers and US domestic spot prices.
This week, wire rod import offers to the US remain unchanged. Offers of imported wire rod in the US domestic market from Germany are still around the level of $31.50 cwt. ($630/nt or $694/mt) DDP loaded truck in US Gulf ports, while offers from Brazil are still reportedly close to German offers.