You are here: Home > Steel News > Steel Matters > Mr....

Mr. Trey Duoto from Duferco Steel Inc: US longs market

Tuesday, 11 September 2007 13:48:20 (GMT+3)   |  
       
During the SteelOrbis Fall ’07 Conference & 57th IREPAS Meeting that took place in Warsaw on September 9-11, 2007, Mr Trey Duoto from Duferco Steel Inc. gave a presentation on the current situation in the US longs market.

Mr. Duoto started his speech with a brief look at the state of the US economy. He remarked that GDP expanded at an annual rate of four percent in the second quarter of 2007, reflecting higher activity in the areas of international trade and business investment. GDP growth in the third quarter is expected to be only two percent and less than two percent in the fourth quarter.

Mr. Duoto proceeded to give a breakdown of US construction spending (total of $1.1 trillion) as follows: residential - $385 billion, non-residential - $346 billion, US government - $289 billion. In July 2007, spending on homes fell for the 17th month in a row, while non-residential construction rose in July to an all-time high. In the same period, construction of shopping centers, office buildings and hotels all showed increases with spending on state and local government projects also at all-time highs.

The figures for US rebar and wire rod imports over the last few years are as follows:

Year

Rebar imports (nt)

Wire rod imports (nt)

2004

1,916,874

3,732,750

2005

1,424,400

2,467,148

2006

2,587,443

3,017,207

2007 YTD through July

1,144,304

921,944

In 2007 up to July, the largest supplier countries of rebar to the US were Turkey (26%), Taiwan (18%), Mexico (13%), Japan (8.2%), Brazil (8%), and Malaysia (7.2%). In the same period, the largest supplier countries of wire rod to the US were China (45%), Canada (20.6%), Brazil (9.4%), Trinidad & Tobago (7.7%) and Japan (5.6%).

Mr. Duoto continued his speech by listing the factors which have the most influence on the current US rebar and wire rod markets. In the US rebar market, the most influential factors are as follows:

  • Large unsold positions by traders and distributors.
  • Distributors are selling below their average cost as well as below their replacement cost.
  • Import pricing
  • Currently, there are 3-4 months of inventory
  • Demand is much weaker than expected

In conclusion, Mr. Duoto listed the most important factors in the US wire rod market:

  • Import prices are higher than domestic prices for low carbon.
  • Weak demand due to housing and automotive markets
  • Weak US dollar
  • The cancellation of Chinese tax and VAT rebate
  • Higher ocean freight charges

Similar articles

India’s ISWPL firms up projects to ramp up rebar and wire rod capacities

25 Jul | Steel News

Belarus-based BMZ inks several export contracts 

16 Feb | Steel News

Turkey’s Kaptan to expand product portfolio with new wire rod mill

02 Mar | Steel News

Danieli to supply wire rod line and slab caster automation to Turkey’s Habas

17 Nov | Steel News

European long steel buyers use up almost half of import quotas as of late October

23 Oct | Steel News

Canada imposes provisional safeguard measures on certain steel imports

12 Oct | Steel News

Slowdown in Turkey’s steel exports continues in September

17 Sep | Steel News

Chinese rebar and wire rod prices mostly continue their uptrend

15 Oct | Longs and Billet

Steel Scene longs panel: Are dumping cases on the horizon for the US’ wire rod and rebar market?

11 May | Steel News

US stainless steel imports and consumption surge in November

15 Feb | Steel News