US steel wire rod prices have moved up for April shipments on previously announced mill increases, sources said Friday, but it was unclear what impact a new trade case, filed by domestic producers this week, will have on pricing.
Four US mills on Tuesday petitioned for antidumping duties on carbon and alloy wire rod imports from 10 countries: Belarus, Italy, South Korea, Russia, South Africa, Spain, Turkey, Ukraine, the UAE and the UK. Gerdau Long Steel North America, Nucor, Keystone Consolidated Industries and Charter Steel also filed for countervailing duty investigations of rod from Italy and Turkey.
While it was unclear in the near term where the trade case may push pricing, it will have a definitive impact, a US-based wire drawer said, given the wide scope of the investigation and its potential to disrupt foreign supply.
Many in the market said they were surprised by the filing of the trade case.
"This was a very aggressive move by the US mill and traders are not going to take any chances with getting stung by these margins," a second US wire drawer said. "Some of the [alleged] margins are high enough to wipe out a trading firm with many tons in limbo."
Dumping margins alleged by the petitioners range from 21.64%-61.64% for Ukraine to a high of 216.50%-821.40% for Russia.
A number of buy-side sources expressed concerns that import tons already on order may be impacted by the trade case, but traders were said to be looking into other sources for material.
If US mills are successful in cutting off access to competitively priced imports, it "leaves independent wire drawers as sitting ducks," the second wire drawer said, expressing concerns that US mills may not have the ability to ramp up production fast enough to prevent shortages in the market, a concern voiced by a number of buyers.
"Plus, since we compete with most of our rod suppliers, they can wield their cost advantage to push us out of the wire market, wherever they want to," he said.
For now, the filing of the trade case should firm domestic wire rod prices, the first wire drawer said, even with scrap prices looking to fall at least $20/lt in April.
In mid-March, US wire rod producers announced a $45/st increase on low-carbon rod and $60/st increase on high-carbon rod for April shipments, with a number of mills attributing the increase in part to rising raw material costs following higher scrap costs in March.
"Even if scrap falls in April, I think the mills will dig their heels in," the first wire drawer said.
S&P Global Platts on Friday raised its weekly US mesh quality wire rod price assessment to $560-$580/st ex-works, up from $540-$560/st.
