Wire rod hikes said sticking amid import lull; more loom

Dec 07, 2007 | 10:59 AM | Michael Cowden

Wire rod prices look poised to rise further in the first quarter, market sources said, noting that rod hikes announced during the past few months appear to be holding up thanks, in part, to dramatically lower imports.

Some wire rod buyers remain deeply concerned about the macroeconomic picture going into 2008, especially considering the bleak outlook for the automotive and housing industries. But mills seem determined to boost prices in the face of spiraling energy and raw material costs, low imports and stronger markets abroad, sources said.

Other mill and buyer sources argue that energy, infrastructure and non-residential construction markets remain firm. And they said exports continue to pick up the slack, even if they have fallen off somewhat in light of rising bulk freight rates, which have nearly doubled in recent months and partially offset the advantages of the weak dollar. In addition, some European companies are making more parts in their U.S. facilities because of the weak dollar, they said.

"Business is not good, there is an absence of good demand," one provider of cold-heading wire said. "But the cost pressures are being recognized by the steel producers. No question pricing went down in the third quarter. And the mills have worked hard to recover it in the fourth."....