As Turkish wire rod offers fall week-on-week, domestic buyers are sticking to comparatively stable prices and short lead times from US mills.
Turkish wire rod prices have been dropping steadily as of late, due primarily to sluggish demand. However, even though current import prices have dipped well below domestic offers, buyers in the US are cautious of long lead times and the uncertainty of the scrap market. If Turkish prices continue to drop, they might be deemed attractive enough to take the risk. For now, Turkish wire rod is being offered in the range of $30.50 to $31.50 cwt. ($672/mt to $694/mt or $610/nt to $630/nt)duty paid, FOB loaded truck in US Gulf ports, reflecting a significant decrease of about $1.50 cwt. ($33/mt or $30/nt) since last week.
Import offers of wire rod from China are also relatively quiet, even though their freight rates are reasonable at the moment. Prices have not changed from last week, with wire rod still offered in the range of $32.00 cwt. to $33.00 cwt. ($705/mt to $728/mt or $640/nt to $660/nt) duty paid, FOB loaded truck in US Gulf ports.
Domestic mills are busy and full, and after weeks of success in getting asking prices (even with lower scrap costs), they are rather reluctant to make deals right now. Any large-volume discounts happening are likely in the Midwest, but in the Northeast and West Coast, mills are remaining firm with their pricing. Scrap is expected to go up in June or July, and until it makes any sort of move, domestic wire rod will likely stay in the current range of $32.00 cwt. to $33.00 cwt. ($705/mt to $728/mt or $640/nt to $660/nt) ex-Midwest mill.
Wire rod demand in the US is picking up with the recent trickle of stimulus-related construction activity, and agricultural equipment, which didn't take as much of a hit during the recession, is still doing well. In a unique report regarding double-demand indication, Iowa-based Deere & Co. reported a quarterly sales increase of 52 percent for heavy construction equipment and a 1 percent increase in sales for agricultural equipment, bringing the company's total profit up 16 percent from the previous quarter. "With support from healthy farm cash receipts, solid commodity prices and low interest rates, industry farm-machinery sales in the United States and Canada now are forecast to be up 5 to 10 percent for the year," the company said in a statement. The press release further suggested that the construction equipment gains in particular were a sign of "resurgence in the economy".