NEW YORK U.S. shores are
set to see a large influx of foreign steel over the next few
months, and wire rod buyers are waiting to get a better picture
of the market before they make decisions about sourcing
Major orders of Chinese rod are
slated to arrive between now and the end of spring, buyers
and traders told AMM, and while domestic prices rose
last month, buyers said that those who purchased foreign
material stand to benefit.
"If you bought a lot of imports
(last year), you rang the bell and grabbed the brass ring," one
buyer said. "If you didnt, you are so screwed.
Theres an awful lot of gnashing of teeth right now for
the smaller guys who bought domestic."
Market participants said that
business was fairly slow over the year-end holiday, and buyers
are mulling their next steps as they return to work. "Over the
holidays, things got really quiet," one trader said. "Now that
were getting into the new year, theres some buying
interest. I think everyone is price-checking and waiting on
decisions. Were gearing up (for) that."
However, some buyers warned that
demand for foreign material may wane, as some anticipate that a
large foreign supply coupled with early signs of scrap moving
sideways might lead domestic prices to soften in the near
"I think people are now fearful
of buying imports because ... people think scrap will move
sideways. If it continues like this in January and February,
theres an awfully good chance that it will go down in
March, April and even May," a second buyer said. "My perception
is that in the winter months, scrap might not go up as it
historically has. People are now saying, Wow, I
dont want to buy (foreign) because by the time it gets
here the deal may not be quite as good."
Buyers said mill lead times have
shortened, which could indicate that domestic mills are growing
hungry for more business.
"Mill lead times are
ridiculously short," the first buyer said. "It takes me longer
to buy a six-pack of beer than it takes me to get a load (of
steel) from them."
Turkey, a traditional wire rod
supplier, has been uncompetitive in the U.S. market since early
last year. Other traders said that the price differential
between Chinese and Turkish rod is about $2 to $3 per
hundredweight, with Turkish prices trending upward.
And with domestic mills hungry
and business conditions lackluster, the upward movement may be
more difficult than expected, buyers said. "We were dead for
December. Wire prices, as we speak, are in free fall.
Were seeing the impact of low-priced material now, and I
can see lots of potential scenarios (for the future)," the
first buyer said.