Import wire rod prices in the US have continued to decline since last week as traders have sought to liquidate their inventories.
Turkish-sourced import rod offers have slipped by about another $1.00 cwt. ($22 /mt or $20 /nt) since last week, with most Turkish mesh-quality imports now ranging from about $21.50 cwt. to $22.50 cwt. ($474 /mt to $496 /mt or $430 /nt to $450 /nt) duty-paid, FOB loaded truck in US Gulf ports. However, some buyers say they can get spot deals for under $20.00 cwt. ($441 /mt or $400 /nt) for inventory on the ground.
While traders' inventory prices continue to sink, there are virtually no bookings taking place for new offers from Turkish mills. Turkish mills are not budging from their prices, citing their increased scrap costs, but US customers are not interested.
The IREPAS and SteelOrbis event which took place in Athens, Greece this week was attended by both wire rod buyers from the US and by Turkish mills; however, unlike at most IREPAS meetings, it was observed that there was no negotiating between the two parties taking place at the meeting, let alone any deals being made. US wire drawers reported that they are still satisfied with their inventories and have no interest in replenishing them. Therefore, it seems unlikely that the Turkish price hike will go anywhere. For now, the pricing trend for import wire rod in the US is still down.
US domestic mills are also getting fairly aggressive with their wire rod offers, though officially, prices haven't budged since last week, with most low carbon offers remaining at a range of $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) ex-mill. There is still a fair amount of discounting taking place for large orders, however.
Domestic wire rod prices are also expected to continue trending down in the near-future, especially in light of the $30 /long ton drop that shredded scrap prices have taken this month, not to mention the weak US demand for wire rod.
Nevertheless, while prices probably haven't hit bottom yet, there seems to be a growing sentiment that demand has hit its lowest point. US wire companies have commented to SteelOrbis that business has been showing some signs of life recently and that demand has at least showed some improvement in the first quarter as compared to the fourth quarter of last year. According to one US wire producer, wire rod prices "might further decrease in May and June but not much longer."
The view that demand is bottoming out and prices should soon follow was expressed by many at the meeting in Athens. As Ugur Dalbeler, chairman of IREPAS and managing director of Turkish steelmaker Colakoglu Metalurji, assured attendees in his opening speech of the conference, "We have left the worst behind us."