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. Its a five. But at least its not a one," a wire rod buyer in the South said on the sidelines of the event.
"People are not very bullish. Theyre buying what they need, but its not gangbusters," a wire rod trader agreed.
Mills have pushed for higher wire rod prices this year, but the market doesnt 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 couldnt," 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 havent increased to the same extent.
"Margins havent 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 hasnt returned to pre-recession levels.
"We think our customers here just run out their inventoriesdont take this as (meaning) business is back," the mill source said.
One wire rod buyer on the exhibition floor urged patience. "Its like a pump. If the airs coming out slow, you dont want to put a pin in it and blow it up. Slowly but surely, and well be OK," he said.
"I dont think we (in the wire business) are making a lot of money, but were doing all right," the wire buyer said. "Lets take our time and go slowly as long as were going in the right direction."