US wire rod mills are trying to keep their prices stable, though they are still under considerable pressure to lower prices from the downward trending import offering prices and the falling scrap prices.
Domestic mills have not started discussing their fourth quarter pricing yet, but indications are that they will do their best to keep prices stable in spite of the weak market. Wire rod demand is very slow and import offers are becoming more competitive, but there are still considerable supply problems.
With several domestic rod mills planning outages in the next couple of months and the strong chance that the export tax rules for Chinese boron-added steel will soon change, domestic mills are hoping that they can keep their prices from slipping. Although they may make some deals for certain large customers depending on how long the market downturn lasts, no official price decrease is expected.
Buyers report, however, that domestic mills' $60 /nt ($66 /mt or $3.00 cwt.) August price hike was not successfully passed along in its entirety to all customers/regions, with current domestic spot prices landing at around $55.50 cwt. to $56.50 cwt.($1,224 /mt to $1,226 /mt or $1,110 /nt to $1,130 nt) ex-mill for low carbon and at around $58.00 cwt. to $59.00 cwt. ($1,279 /mt to $1,301 /mt or $1,160 /nt to $1,180 /nt) ex-mill for high carbon. Again, no official decrease is expected from the domestic side, but the general price trend for spot offers remains slightly down.
On the import side of the market, the latest rumor about the tax change for Chinese boron-added rod imports is that a decision in this matter from the Chinese government will be soon be announced and could go into effect as of September.
A lot of traders are holding back from booking any orders with the Chinese mills in anticipation of the tax change. There are, however, already a lot of shipments scheduled to arrive between now and the middle of October.
For now, the sales price for Chinese boron-added rod imports remains the same as last week, at $54.00 cwt. to $55.00 cwt. ($1,191 /mt to $1,213 /mt or $1,080 /nt to $1,100 /nt) FOB loaded truck in US Gulf ports, though very few, if any, new sales have been made since last week. The mills are reportedly willing to negotiate in order to get offers, but even so, there are hardly any takers.
The general pricing trend for rod imports remains down, though if the VAT rebate for Chinese boron steel rods is removed and an export tax is added, prices for these imports will trend sharply up and likely disappear from the market altogether (not including the material that is already on its way to the US). However, if only the VAT rebate is removed and no export tax is added, these imports may still remain competitive.