While domestic mesh and wire prices have risen in fits and spurts along with domestic wire rod prices over the past several months, the market's fate is now more uncertain due to the recent decreases in scrap prices, which in turn may render the announced May wire rod price increases obsolete.
Sources say that the $55 /nt May price increase for wire rods was only partially accepted by the industrial quality wire drawers, and possibly not accepted at all by most mesh makers. Wire rod producers may be able to get away with some deep discounts they extended to mesh makers in the first quarter. However, mesh makers are paying steep increases for their Q2 rod arrivals as Chinese prices went up significantly and still trending upward.
On the demand side, mesh manufacturers say that despite the bleak residential construction market, they are still receiving a decent amount of business from commercial construction, especially as the weather starts to improve across the country, and they are optimistic that prices will continue to slowly rise.
The market price for a roll of 10-gauge building mesh is approximately $53 to $57 per roll, depending on the area. Texas mesh prices are at the lower end of the pricing spectrum, as producers must compete with Mexican mesh imports, which can be delivered below $50 per roll. Florida is a better paying market, however, it was not immune to the real estate slump, and demand is suffering. Despite the less-than-perfect market conditions, all mesh makers have announced price increases and are hoping to at least achieve part of the announced increases.
As for the wire market, the major low carbon, bright basic and galvanized wire suppliers such as Leggett & Platt and Midsouth Wire have increased their prices in March and April, reflecting similar wire rod price increases. After wire prices rose approximately $2.00 cwt. to $2.50 cwt. ($44 /mt to $55 /mt or $40 /nt to $50 /nt) in April, domestic wire manufacturers recently announced that they will hike prices again in May, also mirroring the price increase announcements for wire rods. But, as with the rod and mesh prices, the increase may be difficult to pass in light of the recent decreases in raw material costs and rather lukewarm wire demand. However, imported wire rod prices, already very close to domestic rod prices, are still trending upward, giving wire producers another good reason to stick to their price increases.
Statistics from the US Import Monitor show that from January through the end of April of this year, the total amount of wire tonnage imported to the US was 233,300 mt, compared to 257,300 mt imported during the same period of the previous year. The top import wire sources in 2007 have been Canada, at 66,300 mt YTD; China, at 54,300 mt; Mexico, at 33,300 mt; Japan, at 17,800 mt; and Korea, at 12,800 mt.
Year-to-date bright basic wire import tonnage at the end of April totaled approximately 96,400 mt. The top import suppliers of bright basic wire to the US this year have been Canada, at 27,900 mt YTD; China, at 17,800 mt; Mexico, at 15,900 mt; Japan, at 11,500 mt; and Taiwan, at 5,400 mt.
YTD imports of low carbon, plated or galvanized wire imports at the end of April totaled approximately 83,800 mt. Top import suppliers of low carbon, plated or galvanized wire in 2007 have been: Canada, at 29,300 mt YTD; China, at 27,400 mt; Mexico, at 13,300 mt; South Africa, at 2,500 mt; and India, at 1,800 mt, tied with Venezuela, also at 1,800 mt.