Amid continued weak demand, both domestic and import
wire rod prices in the US market have continued to trend down since last week.
Most low carbon rod offers from domestic mills now range from $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) FOB mill, reflecting a decrease of $2.00 cwt. ($44 /mt or $40 /nt) since last week.
The main reason for the continued weakening of US rod prices is the lack of demand in the context of a slumping economy. Most rod consumers generally have sufficient inventories and are seeing very slow business themselves, so they are in no mood to buy right now.
Furthermore, prices are projected to soften further as raw material costs continue to trend down and mills get increasingly hungry for business. US shredded
scrap has fallen by $25/long ton in March and is expected to fall further in April. But again, the main culprit for the weakening rod prices is the lack of demand.
While US
longs mills are already running at reduced capacity,
production may have to be trimmed even further to keep in step with the poor demand. Leading US
longs-maker
Nucor said Tuesday that its mill-utilization rate will likely decline to 43 percent in the first quarter. The company also said it expects to post a first quarter loss rather than a profit.
On the import side, prices have slipped as well, with most mesh-quality offers from
Turkey now ranging from about $23.00 cwt. to $24.00 cwt. ($507 /mt to $529 /mt or $460 /nt to $480 /nt) duty-paid, FOB loaded truck in US Gulf ports. However, as has been the case for many weeks now, traders comment that prices are negotiable if they can put a decent-sized order together; however, no one wants to buy right now, regardless of price.
There was some good news for US
wire rod this week, though – data released from the US DOC Tuesday showed US housing starts and permits unexpectedly snapped out of their downward streak in February, rising 22 percent from January. Although it may be too soon to declare that the market has finally bottomed, the February up-tick, after 10 straight months of declines, is certainly welcome news for the economy and for
wire rod.