NEW YORK Domestic wire
rod mills and wire drawers are bracing for a significant
increase in Chinese rod imports, with stepped-up shipments from
the Asian nation into the summer and early fall already
"There is a lot of Chinese rod
coming in," one wire rod trader said. "Chinese wire rod mills
have dropped their price and Im thinking of jumping
About 1,080 tons of Chinese wire
rod are poised to arrive on U.S. shores in May, according to
import license application data from the Commerce
Departments Import Administration. But applications for
Chinese hot-rolled bar imports were at about 69,300 tons so far
for May, most of which is actually wire rod, according to
The majority of Chinese wire rod
imports are most likely misclassified as hot-rolled bar (
amm.com, Jan. 11).
Mays hot-rolled bar import
applications from China are nearly quadruple Aprils
applications level and almost double Marchs import
figures. But one trader said that only about the first 10,000
tons of hot-rolled bar import data actually represents
Importers said wire rod imports
from China will continue to climb in the coming months, with
many rod buyers placing orders expected to hit U.S. ports in
"We are beginning to see worry
about China again. There are all these signals from some of our
customers," one mill source said. "They are hinting that huge
imports are coming in."
"I think their fears are
generally justified," one trader said of domestic mills
anxiety over Chinese imports. "Theres (likely) an extra
100,000 tons hitting over the course of this year."
Because much of the wire rod
that has arrived in the U.S. has been misclassified, making
sense of historical Chinese import data is difficultand
anticipating future wire rod imports is even more challenging
because no single buyer has a full picture of scheduled rod
imports. One trader estimated, however, that U.S. ports would
see a 10- to 15-percent increase in rod deliveries this
A number of rod buyers told
AMM they were ordering increased shipments of Chinese
material for mid-summer to early fall arrival at increasingly
low prices. "Were going to be bringing in a lot more
(Chinese rod). Itll be a significant percent (of our
inventory)," said a high-carbon-rod buyer in the South.
The price spread between
imported rod and domestic rod was about $80 to $100 per ton
earlier this month, according to several sources. But one buyer
said that because domestic mills lowered their prices earlier
this month for June shipments, the spread has narrowed, likely
exerting further downward pressure on import prices.
Import transaction prices for
low-carbon wire rod at the Port of Houston have been reported
as low as $570 per ton ($28.50 per hundredweight) for summer to
early fall arrival, but sources say prices are softening. One
buyer said he was quoted at less than $540 per ton ($27 per
cwt) for Chinese rod for early fall arrival.
"I guarantee thats going
to drive the domestic pricing down, because whoevers
buying those fill-ins is not going to be buying those fill-ins
anymore," said the buyer, noting that the increased Chinese
volumes meant that U.S. buyers would be turning less to
domestic mills to support their inventories.
With additional wire rod
capacity coming online at Charlotte, N.C.-based steelmaker
Nucor Corp.s Darlington, S.C., mill (
amm.com, April 19) and more product scheduled to hit
U.S. shores, domestic mills could face difficulties maintaining
"I think it is going to come in
in a torrent in the next four, five months. Its going to
be a flood, and when I say flood, Im talking
about quantities in excess of 40,000 to 50,000 tons per month,"
the mill source said.
"Its going to be a tough summer," said a rod buyer in