While wire drawers and mesh companies alike report sluggish demand levels, there are indications that improvement in the US wire market might be right around the corner.
Overall construction demand is still in the doldrums, but wire mesh producers are expecting the commercial construction market to experience a moderate pick up soon, and later, a slight turnaround in residential construction. After low carbon wire rod pricing increased this month, mesh producers waited to boost inventory levels until they knew what their customers were going to do. At first, the market was quiet, but as soon as speculation spread of another shredded scrap increase in September (possibly $20-$40/long ton), mesh customers became less hesitant and slowly started to restock. Currently, wire mesh producers are buying wire rod from domestic mills for a little less than the August-announced price increase, in the range of $31.50-$31.75 cwt. ($694-$700/mt or $630-$635/nt) ex-mill, depending on the region. The fluctuations in wire rod pricing have not yet translated into offering prices for 10 gauge rolls of wire mesh; prices are still about $55-$56/roll (same as reported last month), with some large-order customers getting mesh for $54/roll.
While domestic low carbon wire pricing jumped up $1.50-$1.75 cwt. ($33-$39/mt or $30-$35/nt) depending on the mill for September shipments, high carbon wire did not experience as much of a hike. The steadily-improving automotive sector has, for example, lessened the pricing volatility for tire bead-quality high carbon wire rod. Prices have only increased by $1.00 cwt. ($22/mt or $20/nt) in the last month, bringing offers into the range of $38.00-$40.00 cwt. ($838-$882/mt or $760-$800/nt) ex-mill.
Other bright spots in the wire market are reports that some wire drawers and end-use wire manufacturers are expanding facilities and/or investing in new equipment-a positive sign for the future. For example, Baltimore, Maryland-based Marlin Steel Wire recently purchased a $400,000 robot to manufacture housings for electrical components, in addition to a $250,000 machine to make cable brackets.
Until such investments translate into significant improvement in activity, most wire drawers and mesh producers are continuing to prefer domestic wire rod over imported (the ratio remains approximately 70-30 percent respectively). Offers for Turkish wire rod have only increased by $1.00 cwt. in the past month, slightly widening the gap between import and domestic prices. Current prices from Turkey are in the range of $29.50-$30.50 cwt. ($650-$672/mt or $590-$610/nt) duty paid, FOB loaded truck in US Gulf ports.
