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Steel wire market outlook lukewarm

Keywords: Tags  Interwire Trade Exposition, wire rod, steel wire, market outlook, Samuel Frizell


ATLANTA — The steel wire and steel wire rod industry has emerged from its worst years, but business continues to hum along at a mediocre level, attendees at the Interwire trade exposition in Atlanta told AMM, indicating they are lukewarm about the state of the market.

"Business is fair. Not bad, not good. It’s a five. But at least it’s not a one," a wire rod buyer in the South said on the sidelines of the event.

"People are not very bullish. They’re buying what they need, but it’s not gangbusters," a wire rod trader agreed.

Mills have pushed for higher wire rod prices this year, but the market doesn’t appear ready to absorb increased input costs, sources said. They note that announced $35- to $40-per-ton increases effective with April 1 shipments have only partially stuck (amm.com, April 12).

"They have really tried to stick out the increase, but they couldn’t," the trader said of the producer hikes.

Rod mills and rod buyers have been fighting thin margins and overcapacity, and even though demand has picked up, profits haven’t increased to the same extent.

"Margins haven’t improved. Tonnage has. Our sale dollars are up not because of prices, but because of added tons," a second wire rod buyer in the South said.

Demand has picked up recently in certain products, particularly in construction, said one mill source, who added that the business environment hasn’t returned to pre-recession levels.

"We think our customers here just run out their inventories—don’t take this as (meaning) business is back," the mill source said.

One wire rod buyer on the exhibition floor urged patience. "It’s like a pump. If the air’s coming out slow, you don’t want to put a pin in it and blow it up. Slowly but surely, and we’ll be OK," he said.

"I don’t think we (in the wire business) are making a lot of money, but we’re doing all right," the wire buyer said. "Let’s take our time and go slowly as long as we’re going in the right direction."


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