The US wire rod market is still slumping, though some of the mills might say otherwise.
Business is still very slow, and sources say that wire rod inventories are not coming down because the buying trend has changed, with customers buying only what they need these days. A trader told SteelOrbis this week, “Inventories are not coming down because people are buying in smaller amounts than before in order to get a better price and to have better control over their own inventories.”
By buying in small amounts, customers can also hedge against any possible price decreases – which are more likely than not with the continued soft market conditions for wire rod. Unfortunately for the US rod makers, there are no indications that demand will increase enough in the near-term for the pricing trend to turn around.
Some domestic mills have claimed that their order books are full for September rolling, though this is not a big accomplishment since September is just right around the corner, and as one source told SteelOrbis, the claim is “probably not true anyway.”
The only positive thing about the market that can be said is that domestic prices have not decreased in the last week. Most low carbon offers on the market still range from $27.50 cwt. to $28.50 cwt. ($606 /mt to $628 /mt or $550 /nt to $570 /nt) FOB mill, and high carbon offers still range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB mill.
Meanwhile, the import wire rod market in the US remains at a standstill, as hardly anyone is buying import rods, and the main import low carbon rod suppliers (China and Turkey) are not lowering prices due to the strength of other global markets as well as the Chinese export tax and VAT cutback issues. Most import prices have remained stable in the last week, but the overall pricing trend for import rods is up. Realistically, US customers will not pay higher prices, as there are little to no takers at current offering prices. Traders are getting frustrated by the unusually comatose state of the market.
Import offers for future delivery of mesh grade wire rods still range from $28.25 cwt. to $29.25 cwt. ($623 /mt to $645 /mt or $565 /nt to $585 /nt) FOB, loaded truck, in US Gulf ports, and import offers for drawing quality rods range from $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB, loaded truck, in US Gulf ports. Prices are slightly higher in the East and West Coast, by approximately $0.50 cwt.