The attempted hikes by Turkish mills for wire rod offers to the US have been largely unsuccessful, with most mills rescinding their increases.
Import mesh quality rod offers have fallen by approximately $2.25 cwt. ($50 /mt or $45 /nt) in the last week to a range of $26.75 cwt. to $27.75 cwt. ($590 /mt to $612 /mt or $535 /nt to $555 /nt).
One longs trader explained to SteelOrbis this week, "The Turks didn't get any orders at the higher levels so they went down with the prices." He said that although he believes the market is still at the bottom or near the bottom, it is surprising how quickly the Turkish mills made a U-turn with their pricing.
Chinese mills are still in the mix of potential wire rod suppliers to the US but they usually follow the import price decreases slowly. Also, not all the mills are quoting at the same numbers. The more desperate mills do business at closer to the Turkish levels, while others are not offering competitively.
The main reason that the Turkish price hikes didn't spur any buying activity as expected is that demand for wire rod and other long products, in the US and around the world, is still extremely soft, and customers are still only buying what they need, regardless of the cost.
On the domestic side, rod prices have also decreased in the last week, narrowing the gap between domestic and import offers. Buyers say that most low-carbon offers now range from approximately $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt) ex-mill for immediate shipment. This level reflects a decrease of approximately $3.00 cwt. ($66 /mt or $60 /nt) in the last week.
Domestic rod mills are still woefully lacking in orders, although they have made serious production cuts which should eventually make an impact. In a normal market, the US' domestic rod production does not fully meet demand. With very little imports coming in and domestic mills slashing output significantly, once demand picks up, even slightly, supplies may get very tight, very quickly. For now, mills still aren't booking for the first quarter yet, and are waiting for the impact of the production cuts to take effect.