LONDON Turkey could be the next big exporter of wire rod to the United States if anti-dumping and countervailing duties are imposed on Chinese wire rod shipments in an ongoing trade case, U.S. market sources told AMM.
U.S. market participants have been reluctant to agree to new wire rod purchases from China due to fears of import duties.
The U.S. Commerce Department has initiated dumping and subsidy investigations of imports of carbon and certain alloy steel wire rod from China (amm.com, Feb. 21) after a coalition of domestic producers filed a trade complaint in late January (amm.com, Jan. 31) alleging dumping margins between 99.32 and 110.25 percent and subsidy rates above de minimis levels.
"Its too risky to import from China. Trading companies are not taking the risk. There is still the option of importing wire rod from Turkey due to the currency weakness and its weak economy," an East Coast buyer said. "There will be countries that will try to fill the void of China, but it comes down to the price. Chinese wire rod is the most competitive. I think Turkey will be the next big importer. They will fill the void from China in the interim. Turkey has the connections in the U.S. and they have done business with them before."
U.S. importers have several thousand tons of wire rod on order from China that is scheduled for delivery between March and June, according to market participants, but they are not expecting any deliveries after June due to fears of retroactive duties.
Nearly 68,000 tonnes of wire rod were expected to arrive in the United States from China in January followed by at least 26,000 tonnes in February according to import license data through Feb. 18 from Commerces Enforcement and Compliance division.
"The anti-dumping case against China will be a game changer for the U.S. market. We expect the case to be successful. If that turns out to be true, we expect the domestic mills to have plenty of room to raise prices," a Midwest buyer said. "Turkey has traditionally been a major player in the U.S. wire rod market. They have been strangely absent the past year. If China is out of the market, we expect Turkey to be back in the game in a big way."
AMMs wire rod import transaction prices are holding steady at $570 to $580 per ton c.i.f. port of Houston (amm.com. Feb. 18).
China has the most competitive prices for wire rod compared with Turkey or other potential suppliers, such as Ukraine or Spain, market sources said, likely because China uses iron ore to produce wire rod rather than ferrous scrap.
"I had an offer from Turkey at $620 to $630 per ton c.i.f. port of Houston and China was offering $575 to $585 c.i.f. port of Houston. China was in the market before the Chinese New Year (holiday), but I havent heard of anything since then," a U.S. wire rod producer source said. "Before China came on to the scene two to three years ago, Turkey was a big exporter of wire rod to the U.S. It makes sense for them to be the next big exporter to the United States. However, their wire rod export prices are not as competitive as Chinese wire rod prices."