The US wire rod market has remained quiet in the last week, continuing to be characterized by a lack of sales activity and officially stable, though, for the right-sized order, somewhat negotiable, offering prices.
US rod buyers say that domestic mills are still offering low carbon rods at about $32.00 cwt. to $33.00 cwt. ($705 /mt to $728 /mt or $640 /nt to $660 /nt) FOB mill, although there is still some room to negotiate prices slightly below that range for large orders.
On the import front, prices have also remained stable since last week, with most mesh-quality offers from Turkey continuing to range from approximately $26.25 cwt. to $27.25 cwt. ($579 /mt to $601 /mt or $525 /nt to $545 /nt) duty-paid, FOB loaded truck in US Gulf ports.
Traders say that Turkish mills, which have raised longs prices locally, want to go up with their offers to the US, but that they understand that there is not enough demand to warrant a price increase just yet. At the same time, they are not lowering their prices and do not seem desperate for US orders, which is a positive sign. Meanwhile, the Chinese domestic rod market continues to show slight improvements, and Chinese mills are still not offering competitively to the US. However, overall, the international markets remain quiet, particularly in Europe and the Middle East.
Looking forward, as mentioned in past reports, steelmakers in the US are pinning their hopes on President Obama's anticipated $90 billion investment in infrastructure projects, as well as the much hoped-for recovery of the US economy that the incoming administration and the second half of the Troubled Asset Relief Program (TARP) money may be able to bring about.
For now, despite the slight improvements seen in some of the international markets in recent weeks, market conditions for wire rod in the US have yet to register an improvement. On the raw materials side, the domestic scrap market is also looking pretty stagnant, so it seems unlikely that US longs will get a boost from scrap in the near-future. Aside from the optimism generated by the nation's ambitious new president, it is the dwindling of customer inventory levels, rather than an improvement in end-use demand, that is providing the only immediate bright spot for the US market.
Looking back at 2008, final census data for January through November show that wire rod imports to the US totaled just under one million metric tons, at 998,423 mt. Data for the corresponding period of 2007 show a total of 1,306,002 mt. Wire rod import levels from most countries remained relatively stable from the 2007 to 2008 period; however, imports from two countries registered significant changes, year-on-year: Chinese wire rod imports, which totaled 530,458 mt in the first 11 months of 2007, dropped to less than half of that level, coming in at 139,445 mt, for the corresponding period of 2008. The second-biggest change in wire rod imports from the 2007 to 2008 period was from Turkey, which accounted for only 12,597 mt YTD through November 2007, and while only being the fifth-biggest source in 2008 (after Canada, China, Brazil, and Germany), rose to 99,342 mt YTD through November 2008.