While most import wire rod offers for the US are now trending up on higher asking prices from Turkish mills, US domestic wire rod prices continue to sink as mills struggle to book orders.
Since last week, low carbon wire rod offers from US mills have fallen by an average of $1.00 cwt. ($22 /mt or $20 /nt), with most offers now ranging from about $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) ex-mill. Furthermore, buyers say that mills will usually be willing to agree to prices even slightly below this level if a serious buyer wants to negotiate.
With US shredded scrap prices, as of this week, down a net $15 /long ton from last month, there is not a tremendous downward pressure on the market coming from raw materials; however, US wire rod demand continues to be weak, and prices are expected to continue trending down as long as mills continue to have trouble getting orders. However, the downward US wire rod price trend is in contrast to the import price trend, as Turkish mills have raised their prices in recent weeks, backed by stronger demand from other markets.
The longs markets of the Middle East, particularly Egypt, have recently been trending upward due to increases in demand and scrap prices. Egyptian construction is currently seeing somewhat of a revival, as it has received governmental and international aid for a housing construction program, raising Egypt's demand for Turkish longs to about 100,000 mt per month. While this level of purchasing activity is not nearly as much as Dubai was buying from Turkey at the height of the market, Turkish mills are encouraged by the increase in bookings and, for the time being, are not backing down from their heightened export price levels, despite the lack of US interest.
In fact, Turkey, for a change, is not currently the most competitive source offering wire rod to the US. South American mills are now offering better prices to the US, with most offers for mesh-quality rod ranging from approximately $21.50 cwt. to $22.50 cwt. ($474 /mt to $496 /mt or $430 /nt to $450 /nt) duty-paid, FOB loaded truck in US Gulf ports. In contrast, based on the new asking prices from Turkey, Turkish rod would calculate to approximately $23.50 cwt. to $24.50 cwt. ($518 /mt to $540 /mt or $470 /nt to $490 /nt) duty-paid, FOB loaded truck in US Gulf ports. There has not been any US acceptance of the Turkish price level, especially as US domestic prices continue to trend down.