US wire rod market - Price gap continues to narrow

The import wire rod market is still going strong and has improved another $0.50 cwt. ($10/nt or $11/mt) this week. Import wire rod offers for mesh grade now range from $22.00 cwt. to $23.00 cwt. ($485/mt to $507/mt or $440/nt to $460/nt) FOB loaded truck in US Gulf ports and offers for drawing quality range from $23.00 cwt. to $24.00 cwt. ($507/mt to $529/mt or $460/nt to $480/nt) FOB loaded truck in US Gulf ports. The pricing trend is still up, even though the recent price increases of imported rods have not necessarily resulted in higher transaction prices yet. US government license data shows that in March 2006 the five countries that exported the most steel to the US were: Canada, at 27,265 mt; China, at 27,136 mt; Turkey, at 18,103 mt; Czech Republic, at 13,994 mt; and Brazil, at 13,982 mt. Domestically, the pricing trend for wire rod is still neutral, although the narrowing price gap between imports and domestics will ultimately prove healthy for the domestic market. But right now, domestic mills are still in need of orders and are not operating at full capacity. Furthermore, US scrap prices have not seen any substantial price increases. These are the factors keeping domestic rod pricing flat. Domestic offers still range from $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540 /nt) for low carbon FOB mill, and from $28.50 cwt. to $30.50 cwt. ($628/mt to $672/mt or $570/nt to $610/nt) for high carbon FOB mill. Some high volume buyers are still getting low carbon wire rods under $26.00 cwt. ($573/mt or $520/nt) for their commitment of significant tons.