Import wire rod offering prices for the US are still trending slightly up, and the higher accepted prices are now attracting some of import sources that had been absent from the market for a long while.
While Turkish and Chinese offers to the US continue to trend up, the average import rod price for the US has remained stable in the last week, as some northern European mills have started offering to the US with prices that are marginally lower than the other available offers. This relieved some of the tightness in the market, perhaps temporarily.
European steel consumption slows down significantly during this time of the year with construction activity decreasing to a crawling speed because of the holidays and cold temperatures. Also, Europe had experienced above average demand in the first eight months of 2007, though it has slowed down dramatically since the summer holidays. Even though the strong euro makes exports to the US extremely difficult, certain mills have started booking mesh quality wire rods for the US for the first time in months. At least three trading companies are offering in the market, at towards the lower end of the pricing range below.
Currently, most import mesh quality wire rod offers in the US still range from $31.00 cwt. to $32.00 cwt. ($683 /mt to $705 /mt or $620 /nt to $640 /nt) FOB, loaded truck, in US Gulf ports, while drawing quality offers range from $32.75 cwt. to $33.75 cwt. ($722 /mt to $744 /mt or $655 /nt to $675 /nt) FOB, loaded truck, in US Gulf ports.
License data from the US Import Administration reflect the lack of import wire rod arrivals in recent months -- Based on the license data, in November wire rod import arrivals to the US totaled 52,102 mt, compared to 61,230 mt in the previous month and 193,998 mt in November 2006. The US' top import sources for wire rod in November 2007 were Canada, at 24,067 mt; Japan, at 10,630 mt; Brazil, at 8,067 mt; Germany, at 3,742 mt; and South Korea, at 1,998 mt -- all high carbon wire rod sources. Low carbon wire rod arrivals have diminished to almost nothing.
On the domestic side, not much has changed in the last week, as the mills have not made a big push for first quarter bookings yet. The wire business is still only lukewarm, though the pricing trend for domestic rods is still slightly up on account of the higher-priced offshore offers. More domestic price increases are expected to take place in the first quarter.
This week, domestic low carbon wire rod offers continue to range from $30.50 cwt. to $31.50 cwt. ($672 /mt to $694 /mt or $610 /nt to $630 /nt) FOB mill, while high carbon offers range from $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt) FOB mill.