US wire rod market – Chinese prices up or down?

Import wire rod pricing is still slowly trending downward, and import offers for both mesh quality and industrial (drawing) quality rods have declined by approximately $5 /nt ($5.50 /mt or $0.25 cwt.) since last week. Import mesh offers on the market now range from $23.50 cwt. to $24.50 cwt. ($518 /mt to $540 /mt or $470 /nt to $490 /nt) FOB, loaded-truck, in US Gulf ports. Drawing offers now range from $25.25 cwt. to $26.25 cwt. ($557 /mt to $579 /mt or $505 /nt to $525 /nt) FOB, loaded-truck, in US Gulf ports. For drawing quality grades, some of the main suppliers are willing to discuss special deals below everyday prices for large tonnages. Demand for wire products has been slowing down since June, so the demand for wire rod is only lukewarm right now. Most wire rod consumers are done with purchases for 2006 arrivals and they are not in a hurry to fix January and February arrivals yet. In the meantime, Chinese rod exports are giving mixed signals. While some reports from China confirm scrap and billet price increases and the wire rod pricing to trend upward, the prices offered in the US are getting lower. However, most traders believe that the price decrease will be manageable and that the market is close to bottoming out. The domestic pricing trend for wire rods is still neutral, and prices have not changed since last week. Domestic mills are not busy and are looking for business, but wire drawers' inventories are high, so booking is light. Domestic offers still range from $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB mill for low carbon, and from $30.00 cwt. to $32.00 cwt. ($661 /mt to $705 /mt or $600 /nt to $640 /nt) FOB mill for high carbon. Large buyers have the upper hand and negotiate better deals than the above numbers. The Sicartsa strike is over, and the mill is expected to reach full production within the next couple of weeks. This should add some more rod tonnage in to the Mexican and US market. Grupo Villacero, the parent company of Sicartsa, is rumored to be in talks with Mittal Steel for a possible partnership. Sicartsa is in the same area with Mittal's slab plant at Lazaro Cardenas. Mittal also owns wire rod plant in the US and Canada.