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Steel wire rod demand patchy as imports flow

Keywords: Tags  steel wire rod, imports, scrap, high carbon, low carbon, Samuel Frizell

NEW YORK — Domestic wire rod mills report mediocre business conditions overall amid flat demand and strong import competition.

"We’re busy but we could be a lot busier," said one mill source.

Market sources across a variety of wire rod products said the specter of increased imports is one of the main factors affecting business. "(Customers) are telling us they’re buying imports, so how much is left to keep our mill going?" said a second mill source. "There’s no way the domestic mills could fall to (import) prices to protect their butts. ... It’s going to hurt us."

Though China is largely expected to be the biggest wire rod import player through the summer (, May 17), sources have also reported an influx of Mexican wire over the past couple of months that has chipped away at some regular orders.

Adding to the pressure is the recent long winter that delayed the typical spring uptick in wire demand, particularly for sales of low-carbon wire into the agriculture sector.

"The (agricultural) side of it is down from last year because there was no spring. And on the industrial side, there just doesn’t seem to be the same amount of business," said a low-carbon rod buyer in the Midwest. "Things are slow, but we’ve endured in the past and we’ll do it again."

But a second low-carbon rod buyer in the Midwest said things aren’t just flat; they’re down.

"Our order entry just went down in the last couple of weeks to a trickle," he said.

But while low-carbon wire rod and wire demand remains sluggish, sources said the higher-carbon rod and wire markets remain a relative bright spot.

"Cold-heading remains really strong. The only imports you face in cold-heading rod is coming on from Canada, and they’re just part of the team," said one high-carbon rod buyer in the Northeast. "(And) anything related to automotive is pretty good."

Some wire rod buyers selling into strong construction markets in the South and West have also been happy with sales. "Housing data is ticking up. ... There’s been a return of residential construction," one high-carbon rod buyer in the South said.

Wire rod transaction prices have dropped about $20 per ton from this time last month. Mesh-quality low-carbon wire rod prices have dropped to around $650 per ton ($32.50 per hundredweight) f.o.b. mill; industrial-quality low-carbon rod is down to $670 per ton ($33.50 per cwt); high-carbon wire rod is down to $690 per ton ($34.50 per cwt); and cold-heading-quality material is down to $750 per ton ($37.50 per cwt), sources said.

Several mill sources reported they were holding firm on published prices, despite wide spreads between import and domestic material.

"(A spread of) four, five, six dollars a hundredweight? You’d be embarrassed even to bring it up," the second mill source said of making deals with rod customers.

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