Both low and high carbon wire rod prices have remained neutral in the last month, but various outside factors have made both grades vulnerable to trend shifts.
Although manufacturing activity in the US is still expanding (according to the Institute of Supply Management), reduced auto production in April resulted in a slight dip in the ISM's Purchasing Managers Index (by 0.8 percentage points). While the drop is not exactly attributed to lowered auto demand, parts shortages from Japan are still a contributing factor to the slowdown, as well as weather-related plant disruptions, such as severe tornados in the US Southeast in late April and current flooding conditions along the Mississippi River. Demand for specialty-grade wire products used in auto production has been affected, but prices have remained neutral. US domestic high carbon wire rod is still in the range of $42.00-$43.00 cwt. ($926-$948/mt or $840-$860/nt) ex-mill, while PC Strand has also leveled off at $44.00-$45.00 cwt. ($970-$992/mt or $880-$900/nt) ex-mill. Additionally, welding wire has been heard of in the range of $47.00-$48.00 cwt. ($1,036-$1,058/mt or $940-$960/nt) ex-mill. However, the current lull in pricing--in contrast to the sharp uptrend seen in Q1--is not expected to last long. Sources tell SteelOrbis that specialty grades will likely follow a slight uptrend in late Q2/early Q3.
Low carbon wire rod has also followed a neutral trend in the last month, with spot prices remaining in the range of $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) ex-Midwest mill. Because a wide variety of end-uses affects demand levels for low carbon rod, prices have not been too affected by the continuous slump of the construction industry. Aside from auto production, manufacturing grew 0.2 percent in April, according to the Federal Reserve, keeping wire rod demand afloat. But as mentioned, construction is still in the doldrums, and wire mesh producers are still reporting lackluster sales. Nevertheless, they have been able to keep 10 gauge mesh roll prices level in the last month--prices are still $73-$74/roll on the East Coast, and about $3-$4/roll less in the Gulf.
Wire rod imports, on the other hand, are few and far between. US traders report marginal inquiry activity, considering that current import prices from Turkey are only $0.50 cwt. ($11/mt or $10/nt) less that US domestic spot prices, in the range of $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) duty paid FOB loaded truck in US Gulf ports.
As for wire currently arriving in the US, there has been a noticeable down-tick since March, but May levels still have time to catch up to April. According to license data from the US Steel Import Monitoring and Analysis System (SIMA), the US has imported 55,205 mt of wire rod as of May 17, whereas April saw an influx of 79,795 mt and March registered 82,118 mt (census data). However, in a reversal of previous trends, Turkey is leading the way for imported wire rod to the US, with 17,572 mt so far this month, compared to Canada's 15,750 mt.
May imports of drawn wire are also lagging behind April levels, with May's current level of 24,488 mt nearly half of April's 49,020 mt. As for sources of imported drawn wire to the US, China is the top source so far in May (with 6,861 mt), followed by Mexico (5,420 mt) and Canada (5,276 mt).
Export data is only available through March so far, but US Department of Commerce stats show a definite uptrend for the first three months of 2011. The US exported 17,883 mt of drawn wire in March, mostly to NAFTA partners Canada and Mexico, compared to 15,425 mt in February and 14,399 mt in January. As for wire rod, the US exported 13,661 mt in March, primarily to Canada, compared to 12,693 mt in February and 11,049 mt in January.