Domestic wire rod spot prices in the US have moved up by $2.00 cwt. ($44 /mt or $40 /nt) in the past week following domestic mills' recently announced price increase for April shipments.
Buyers say that the $40 /nt price increase that domestic mills, including ArcelorMittal N.A. and Nucor, announced last week has been accepted by the market, with mills taking a firm stance and, in most cases, not allowing for any negotiations on prices.
Accepted offers of low carbon rod from domestic mills now range from $39.50 cwt. to $40.50 cwt. ($871 /mt to $893 /mt or $790 /nt to $810 /nt) FOB mill. Domestic high carbon offers now range from $42.00 cwt. to $43.00 cwt. ($926 /mt to $948 /mt or $840 /nt to $860 /nt) FOB mill, and mesh offers range from $38.50 cwt. to $39.50 cwt. ($849 /mt to $871 /mt or $770 /nt to $790 /nt) FOB mill.
Many US wire drawers don't have sufficient rod supplies to last them past May and, as there are no cheaper import alternatives, the limited amount of domestic material available is customers' only source unless they want to pay significantly more for import rods. There is a good chance that domestic mills will continue to keep their pricing below that of foreign mills in order to discourage offshore buying, but with import prices continuing to skyrocket, there is still a wide gap between domestic and import prices. For these reasons, there is still a significant amount of room for domestic rod prices to increase this spring.
On the import side, rod offers for US customers have risen by approximately $1.00 cwt. ($22 /mt or $20 /nt) in the past week, with mesh quality offers now ranging from $41.50 cwt. to $42.50 cwt. ($915 /mt to $937 /mt or $830 /nt to $850 /nt) FOB, loaded truck, in US Gulf ports, and drawing quality offers now ranging from $43.25 cwt. to $44.25 cwt. ($954 /mt to $976 /mt or $865 /nt to $885 /nt) FOB, loaded truck, in US Gulf ports.
Turkish mills are still the only major sources offering rod to the US and, as the scrap market in Turkey gains more and more momentum, mills' pricing expectations for long products are increasing. Therefore, the import pricing trend remains strongly up.
Import license data from the US Import Administration show that in February 2008 rod imports totaled 72,681 mt, with most tonnage coming from Canada, which supplied 33,540 mt. Other main sources in February include Brazil, at 17,455 mt; Japan, at 9,573 mt; Trinidad & Tobago, at 5,602 mt; and South Korea, with 3,831 mt.