US wire rod market: Developments from south of border

The pricing trend for domestic wire rod is still neutral. However, there are reports that some domestic rod mills are seeking large orders which are open for price negotiations. Since there is no dominant wire rod producer in the US and there is no published pricing, these rumors of price negotiations are the first indications that the prices may slip in the not-too-long run. Still, we have not seen any signs of general price decreases since last week, and domestic prices 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. Import prices have also not budged since last week, with mesh grade ranging from $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) FOB, loaded-truck, in US Gulf, and industrial quality (drawing) wire is still ranging from $25.75 cwt. to $26.75 cwt. ($568 /mt to $590 /mt or $515 /nt to $535 /nt) FOB, loaded-truck, in US Gulf ports. Although we haven't seen any change in import prices since last week, the import pricing trend for wire rod in the US is still slightly down. Western European mills are still not interested in shipping to the US because of the relatively weak dollar and more profitable Euro-denominated transactions in their home markets. Europe is now the only strong market in the world for wire rod products. The strike at the Sicartsa mill in Mexico is still on, but the dynamics of the situation may have changed. Officially, the strike continues. Reports in the local media quoted union officials as saying that Sicartsa and the union are as far apart as ever. However, rumors in Lazaro Cardenas and Monterrey speculate that Sicartsa's sale to an international steel conglomerate and a subsequent settling with the union are imminent. In other wire rod developments in Latin America, the rapid price decline for wire rod prices in Brazil could affect prices in the region and the US, particularly for critical high carbon grades, Brazil's main wire rod export to North America. Experts predict that the very strong wire rod cycle in Latin America may be nearing its end.