NEW YORK Wire rod offers
from China and Turkey have edged up in price slightly in recent
weeks, leaving those imports with a less-competitive edge due
to a narrowing price gap with domestic material, traders
"Foreign offers have inched up a
little bit. Turkey has been out of the U.S. market for some
time, and the Chinese have been successful in inching up their
prices by $10 to $15 (per ton)," one trader said. "The Chinese
are definitely feeling a little more bullish."
A number of buyers and traders
said earlier this year that large shipments of wire rod from
China were set to enter the United States as early as the end
of the first quarter (AMM, March 16). Market sources
cited relatively low Chinese prices coupled with a number of
domestic mills raising prices by $20 per ton in mid-March,
which pushed some buyers to switch to foreign material.
"I know the domestic mills
arent very happy with whats going on with imports,
and theyre doing all they can to protect pricing," one
buyer said. "Yet the guys who came out with increases kind of
set everything in motion. They got people looking offshore
Monthly rod imports reached
56,038 tonnes through April 12, according to import license
data from the U.S. Commerce Department. Much of that gain was
led by 21,936 tonnes from China, which shipped just 230 tons in
all of 2011. March license data put U.S. imports at 119,311
tonnes, led by strong gains from Turkey.
"Theres been a new wave of
offers. The previous months bookings were done at a lower
level," the trader said. "Now the Chinese are trying to lift
them. Theyre going back out into the market with the
pricing to see if they can get any interest. It will be
interesting to see how long it can go for."
Rod transactions at the Port of
Houston were around $680 to $710 per short ton, market sources
said, compared with domestic prices of $730 per short ton.
Despite still-lower prices for
imports, not everyone was feeling threatened.
"The import competition is
definitely regional. Some of the mills are in better shape," a
second trader said. "The ones in the South, like Gerdau (Long
Steel North America) in Beaumont (Texas), are more affected by
Chinese imports coming into Houston than those in the
However, even with a narrowing
gap, some sources said there is still enough interest in
foreign material. "Their hesitation is with the three-month
lead times. Overall, the price gap has gone back to attractive
levels to be considered (over) the domestic pricing," the
second trader said.
Traders say the flow of imports
from China isnt likely to slow in the near term due to
the overall economic slowdown in China. "The (economic)
slowdown is leaving the Chinese with some capacity and
theyre looking for a home for it. I dont see it
changing anytime soon," a third trader said.
Going forward, traders and
buyers believe there will be more foreign product hitting U.S.
shores despite increasing price competition.
"Theres decent business
out of China and Turkey right now, even if they raised their
prices to the U.S.," the third trader said. "U.S. mills are
becoming more cautious because theyve realized they lost
out a fair bit."