US wire rod market starts to slide again

US domestic wire rod mills have again started to give discounts and special offers for large tonnage buyers, causing domestic wire rod prices to decrease on average by $0.50 cwt. ($11 /mt or $10 /nt) over the past week. Most domestic low carbon wire rod offers in the US now 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 $28.00 cwt. to $29.00 cwt. ($617 /mt to $639 /mt or $560 /nt to $580 /nt) ex-mill. The domestic pricing trend is still down, and as a result of mills discounting to spur buying activity, prices are likely to dip even lower before the year-end. Import pricing has remained stable since last week. There were reports that certain Chinese mills upped their wire rod prices last week in expectation of the VAT rebate reduction. However, this week it seems that most Chinese mills are not raising prices. With their slow home market and the slow export market, Chinese mills are hungry for orders from the US and are willing to gamble by booking low-priced offers for now. Offers for mesh quality wire rod still range on average from $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. Import drawing quality rod prices range 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. The pricing trend for import wire rod pricing is neutral, since China - the US' primary source for import wire rod - is keeping prices stable for the time being. Also, rumors of yet another strike at Sicartsa in Mexico could change the market situation there and, by extension, in the US. Preliminary census data from the US Steel Import Monitor shows that during the month of October 2006, the following countries exported the most wire rod tonnage to the US: China at 138,811 mt, Canada at 23,187 mt, Turkey at 14,503 mt, Germany at 9,496 mt, and South Africa at 8,324 mt.