|Slow demand and continued negative sentiment have caused wire rod prices in the United States to edge lower while the cost of imported material remains steady, Fastmarkets AMM has learned.
Fastmarkets' assessment for industrial quality (IQ) low-carbon wire rod widened downward to $38-40 per hundredweight ($760-800 per short ton) fob mill on Tuesday March 19, down from $38.25-40 per cwt previously.
At the same time, imported wire rod stood at $744-762 per ton cfr Port of Houston.
"Market sentiment [is] still pretty negative currently," a trader source said.
Mill capacity, high inventories and a slowing economy are all dampening market sentiment, according to a wire rod buyer.
Moreover, industrial quality low-carbon wire rod prices did not see an upside from a rebound in this month's ferrous scrap market. Indeed, Chicago shredded scrap settled at $345 per gross ton at the conclusion of March's trade, a month-over-month increase of $20.
There had been rumors of a price increase from domestic mills in previous weeks, the buyer said, but such talk has abated.
"I'm not seeing enough activity in the marketplace to warrant an increase," this source said.
Furthermore, Liberty Steel USA's $35-per-ton price increase for shipments from its Liberty Steel Georgetown mill had failed to gain traction in the domestic market.
"The Liberty announcement doesn't seem to have been followed," the buyer added. "There isn't enough demand in the industry."
"The sentiment is that they [domestic mills] want a raise, but [market] sentiment is flat to down," a second trader commented. "The economy has slowed and people have plenty of inventory."
"Nothing has changed in the past thirty days," a second buyer stated, who previously cited harsh winter weather, concerns over the vitality of the US economy, and uncertainty over the Section 232 tariffs possibly coming off in favor of quotas downward pressure points on the domestic market.
On the latter point, participants in the flat-rolled market echoed similar trade concerns.
"Demand is not strong," a wire rod consumer said.
Beyond the factors cited by market participants, this source argued strong competition from imported finish goods that are not subject to the Section 232 measures or anti-dumping duties are applying downward pressure on domestic wire rod prices as well.
"Our issue is finished goods identical to what we manufacture out of wire rod coming in from China and India selling at below our costs," this source explained. "As finished goods, these products are not subject to steel tariffs, so the Chinese and Indian steel costs for their finished goods are much lower than our costs for steel, offsetting the increase in freight from China and India."
Furthermore, availability isn't an issue for the domestic market.
"I think there's plenty of domestic supply right now," a second consumer said. "If you want IQ it's there."
Most sources reported lead times ranging between two to three weeks.
"Lead times will be the same going into next month," reported a third trader.
There is talk of rising prices due to raw material costs and international prices moving up some, the first trader said, but customer inventories need to come down and demand needs to pick up first.
"Hopefully with improving weather this can happen," this source added.
Beyond warmer, drier weather, the domestic market could see a slight upswing from April to June when seasonal projects move forward, according to the second trader.
"The extended winter is partly the reason why things are slow, but I think it's going to pick back up," a third trader concurred.
As of March 19, 70,564 tonnes of foreign wire rod have already been licensed for entry into the United States, surpassing February's total of 62,102 tonnes, according to the latest data from the US Commerce Department's Enforcement and Compliance division.
So far the top three exporters to the US market this month are Malaysia, Vietnam and Japan at 19,627 tonnes, 12,039 tonnes, and 11,650 tonnes respectively.
This is the first time the US market has seen Malaysian wire rod in over a year.
According to the second trader, the most common import offers on the market are for German, Greek and Egyptian material for loaded truck prices of $38.50 per cwt.
The second buyer saw similar offers originating from the same countries, but declined to pursue the material since the offers are at level with what he's paying for US wire rod.