US wire rod market sings “Silent Night”

The past week has been very quiet for the US wire rod market. Domestically, business is still weak, though prices did not decrease any further over the past week. Still, the pricing trend is still down, and buying activity is minimal. The strike at Mexican wire rod mill Sicartsa is now over, with employees back to work this week. This will result in more tonnage on the market, which could eventually result in lower US prices as well. Domestic low carbon offers still range from $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) ex-mill, while high carbon deals range from $27.50 cwt. to $28.50 cwt. ($606/mt to $628 /mt or $550 /nt to $570 /nt) ex-mill. The import wire rod market has also been quiet. Although price increases have been expected from Chinese wire rod mills in order to offset the VAT rebate reduction, this still has not happened on a widespread basis. As we mentioned last week, the wire rod market in Turkey is starting to pick up due to good weather and strong raw material prices. However, the strengthening Turkish market has not had a big impact on their export prices to the US just yet, since Turkish mills are not yet fixing orders from the US and are still waiting for the US market to improve. The import pricing trend is still neutral. Import wire rod offering prices have stayed at the same range as last week, with mesh grade still going for $22.75 cwt. to $23.75 cwt. ($502 /mt to $524 /mt or $455 /nt to $475 /nt) FOB, loaded-truck, in US Gulf ports. Drawing quality still ranges from $24.50 cwt. to $25.50 cwt. ($540 /mt to $562 /mt or $490 /nt to $510 /nt) FOB, loaded-truck, in US Gulf ports from most sources. Some Chinese drawing quality might run $0.50 cwt. ($11 /mt or $10 /nt) below this range. Official data from the US Steel Import Monitor show that during the month of November 2006, the following countries exported the most wire rod to the US: China at 108,070 mt, Canada at 23,693 mt, Malaysia at 14,229 mt, Japan at 10,826 mt, and India at 10,358. YTD figures show that the top exporters of wire rod to the US in 2006 have been China, Canada, Turkey, and Brazil.