US wire rod market - domestic producer discounts become more prevalent

Although there have been no official price decrease announcements, domestic wire rod prices in the US have slipped $0.50 cwt. ($11 /mt or $10 /nt) since last week as a result of discounting and special offers. Most domestic low carbon wire rod offers now range from $25.50 cwt. to $26.50 cwt. ($562 /mt to $584 /mt or $510 /nt to $530 /nt) ex-mill. High carbon prices have also slipped $0.50 cwt. to a range of $28.50 cwt. to $30.50 cwt. ($628 /mt to $672 /mt or $570 /nt to $610 /nt). Wire companies are suffering from lack of demand, and their sales are down 20 to 30 percent compared to the same period last year. As a result, most have import inventories piled up, and whatever holes they have, they can fill by ordering from domestic mills at bargain prices. Most rod mills are operating at 50 to 60 percent capacity. The pricing trend is still down, but domestic producers are doing what they can to ensure that the situation doesn't become too drastic. Despite cutbacks in production, special deals below the mills' official prices are still around. The pricing trend for import wire rod is still flat, and buying activity is very quiet. The Chinese domestic market is still stable, so they are not offering much tonnage to the US. The Turkish domestic market is stable as well. The only market that is offering aggressively is the Mexican market. Import mesh grade prices still range on average 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. Import drawing quality rod prices still range from $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) FOB, loaded-truck, in US Gulf ports.