Import wire rod prices for the US continue to rise, and while many buyers thought that Turkish prices might have peaked already, this has turned out not to be the case.
With scrap prices in the region rising once again, prices for Turkish mesh quality wire rod offers have risen by another $1.00 cwt. ($22 /mt or $20 /nt) in the last week, with the new sales price for US customers now ranging from $52.00 cwt. to $53.00 cwt. ($1,146 /mt to $1,168 /mt or $1,040 /nt to $1,060 /nt) FOB loaded truck, in US Gulf ports. While no bookings have yet taken place at the upper end of this range, it is expected that the new levels will ultimately be accepted due to the lack of other import options for US buyers.
Chinese import mesh quality rod offers are still trending slightly lower than the Turkish price at a level of $48.00 cwt. to $49.00 cwt. ($1,058 /mt to $1,080 /mt or $960 /nt to $980 /nt) FOB loaded truck in US Gulf ports. However, traders say that these offers are very limited in size and grade, with many buyers having to pay the Turkish price instead as they cannot get the exact grade they need from China. These offer levels are also headed upward in the next round of pricing, and there is not expected to be any increase in availability from China for the US as they are gearing their sales mostly towards the Asian market. As an international wire rod trader told SteelOrbis this week, "USA is just not on China's radar at the moment."
Generally, with the rising raw material costs and strong demand worldwide, the import pricing trend for wire rods is still pointing in a squarely upward direction, and the US will likely end up accepting these prices because of the limited domestic supply.
In the US domestic market, prices for May shipments have risen to a level $48.50 cwt. to $49.50 cwt. ($1,069 /mt to $1,113 /mt or $970 /nt to $1,010 /nt) ex-mill for low carbon rods, and $51.00 cwt. to $53.00 cwt. ($1,124 /mt to $1,168 /mt or $1,020 /nt to $1,060 /nt) ex-mill for high carbon rods. These prices are also trending strongly up due to the anticipated scrap price hike for June in addition to the tight availability in the domestic market. With import offerings being minimal, and domestic mills not working at full capacity and keeping customers on "controlled order entry", the US mills are in a strong position to continue raising prices despite the sluggish demand from end-use markets, namely, housing and automotive.
License data from the US Import Monitor compiled through April 29 show that there have been virtually no wire rod import arrivals this month from China, which was once the US' largest import wire rod source. Top sources in April (based on license data) include Turkey, at 35,766 mt; Germany, at 31,139 mt; Canada, at 26,909 mt; Japan, 12,920 mt; and Brazil, 10,759 mt.