NEW YORK Tight
competition among concrete reinforcing steel wire mesh
producers in Texas and the Southwest is leading to aggressive
market tactics, with some producers bypassing their
distributors and selling directly to distributors
customers, sources told AMM.
"Producers are getting
more aggressive. Theyre going directly to the customer
themselves and theyre not going through distribution," a
source at a wire mesh distributor in Texas said.
Wire mesh prices in
the Texas market have slumped in recent months, dropping about
$20 per ton depending on the customer, a wire mesh producer
source said, creating increasing competition among producers to
widen their customer bases.
"People are starting
to go down below the level were comfortable with," a wire
mesh producer source in Texas said of competing producers. "We
dont like those prices. And demand for finished product
continues to go down."
A second wire mesh
producer source in Texas confirmed he does not sell to certain
larger distributors, saying that he cannot to sell to them
because they demand lower prices than his company can afford.
He added that he prefers to sell further downstream to obtain
more comfortable margins.
"We sell to some but
not the (distributors that) ask for a lot of attention and a
very good price. We are not willing to do that," another wire
mesh producer source said.
Distributors that buy
steel from wire mesh mills, meanwhile, are increasingly finding
their normal customers have been contacted by wire mesh
definitely gotten tougher. ... Some of the mesh wire
manufacturers still want to quote us but some are quoting our
customers direct," a wire mesh distributor source in Oklahoma
said. "There are certain mills that have a reputation for doing
this kind of thing. Shoot, Ive run into a couple of guys
this year Ive never even heard of that are mill selling
direct to some of my customers."
"Its a pretty
ugly business," a wire mesh distributor source in Texas said.
"(Two mills in particular) will step on toes pretty regular.
... Its just gotten worse and the distribution channels
have really eroded."