Although Chinese wire rod prices are expected to increase due to China's new export tariff on rods announced last week, US domestic producers have not yet pounced on this opportunity to raise their prices since domestic demand for wire rod is still slow.
As business remains relatively quiet, domestic wire rod producers are still willing to cut prices for large buyers. Still, the domestic pricing trend is slightly up due to the expected increase in Chinese prices. Domestic producers will raise prices in August, but only modestly. Early indications are that domestic prices will increase by approximately $10 /nt for August shipments.
For now, most domestic low carbon wire rod offers on the market continue to range from $29.00 cwt. to $30.00 cwt. ($640 /mt to $661 /mt or $580 /nt to $600 /nt) FOB mill. High carbon offers still range from $31.50 cwt. to $32.50 cwt. ($694 /mt to $717 /mt or $630 /nt to $650 /nt) FOB mill.
Another development in the wire market is the brand new antidumping filing by five US nail producers against China and United Arab Emirates. Legal action for downstream products like nail and wire is rare in the industry due to cost and mixed success rates. Nail producers have to demonstrate serious injury or threat of injury in order to succeed in the dumping case. This should not be too hard because Chinese origin nails take a large chunk of the US domestic market share. The first decision to go forward will take place at US International Trade Commission by early July. The US ITC will decide if there is merit in continuing with the investigation and if there is possibility of injury to the industry. If they decide negatively, they will terminate the investigation, as they did with the last wire rod antidumping petition.
Since last week, Chinese wire rod mills have raised their offering prices to the US to reflect some of the export tariff, though these offers have not been accepted by the market yet and are unlikely to go through any time soon. US wire rod buyers are not very hungry and there is plenty of domestic availability at similar prices. Even Turkish wire rod offers, which have been priced out of the US import market for the past several months, are starting to look more competitive in light of the new prices out of China.
Accepted import offerings for mesh grade wire rod continue to range from $27.75 cwt. to $28.75 cwt. ($612 /mt to $634 /mt or $555 /nt to $575 /nt) FOB, loaded truck, in US Gulf ports. Drawing quality offers now range from $29.50 cwt. to $30.50 cwt. ($650 /mt to $672 /mt or $590 /nt to $610 /nt) FOB, loaded truck, in US Gulf ports. The pricing trend remains strongly up.