NEW YORK Domestic wire
rod mills report mediocre business conditions overall amid flat
demand and strong import competition.
"Were 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 theyre buying imports, so how much is left to
keep our mill going?" said a second mill source. "Theres
no way the domestic mills could fall to (import) prices to
protect their butts. ... Its going to hurt us."
Though China is largely expected
to be the biggest wire rod import player through the summer
(amm.com, 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
"The (agricultural) side of it
is down from last year because there was no spring. And on the
industrial side, there just doesnt seem to be the same
amount of business," said a low-carbon rod buyer in the
Midwest. "Things are slow, but weve endured in the past
and well do it again."
But a second low-carbon rod
buyer in the Midwest said things arent just flat;
"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
"Cold-heading remains really
strong. The only imports you face in cold-heading rod is coming
on from Canada, and theyre 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. ...
Theres 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?
Youd be embarrassed even to bring it up," the second mill
source said of making deals with rod customers.