US wire rod mills run reduced schedules as steel prices plunge

Like the rest of the global steel industry, US-based producer’s ofsteel wire rod...

Like the rest of the global steel industry, US-based producer’s ofsteel wire rod for the automotive, construction, and manufacturingindustries are hurting due to weak demand and declining prices. Marketparticipants say that selling prices have plunged about 50-60% over thepast six months, compared with levels in the range of $1,100-1,200/streached in August 2008.      It is said that wire rod prices may continue sinking although demandhas probably reached its low. Low-carbon industrial wire used in fencingand wire mesh is currently selling in the US for about $400/st ($440/mt)ex-works. Some wire rod offers were heard as low as $354-362/st($390-400/mt), but this material is believed to be liquidation ofinventory. High-carbon and annealed wire-drawing grades used in automotivevalves, springs, cables, and fasteners are priced higher at around $455/st($500//mt).     Platts does not provide a price assessment for wire rod, but spotmarket prices have been confirmed with a cross-section of market sources.Although actual selling prices have dropped; mills have kept theirpublished list prices steady. The official ex-works price for low-carbonwire rod from one mill remains at $500-520/st, down from about $740/st inDecember, according to Ulf Svensson, editor of wireworld.com For imported material, Turkey offers were heard at $430-450/st($474-496/mt), down $20/st from last week. China export offers havedropped below the March level of $430/mt FOB China port, according toseveral sources, in line with weaker domestic market trends.ArcelorMittal said this week that many employees returned to work atits wire rod mill in Georgetown, South Carolina, as the plant resumedoperations. Production and maintenance workers returned on April 13;rolling mill workers are scheduled to return to work on April 20, accordingto United Steelworkers local union President James Sanderson.More than 220 employees at Georgetown were sent home at the beginningof March, the third time since October that lack of orders forced theplant to go idle. In January, about 300 workers were laid off for up to sixweeks, but the company only called back 250, and permanently laid off 51.The mill has two electric arc furnaces that can melt 1 million st/year andit can roll 750,000 st of wire rod. It primarily serves the construction,automotive and industrial markets.     In Peoria, Illinois, Keystone Steel & Wire has been operatingon-and-off for the past several months, depending on orders fromcustomers. The wire rod mill went down for annual maintenance and repairsin November, but has not returned to full production. Keystone hascapacity of 820,000 st/year and produces billet, wire rod, industrial wireand finished products like nails and fence posts.Keystone has operated when the company had orders to fill, but has hadshutdowns in between, said Bert Downing Jr., vice president and CFO ofKeystone Consolidated Industries, the Dallas-based parent of KeystoneSteel & Wire. "We’ve tried our best to keep as much business going as wecan. We hope it will pick up soon," said Downing.Production workers at the wire rod mill are laid off and recalled on aweek-to-week basis, affecting about 800 employees. "Since October, we haveworked a total of five weeks. I know guys who work one week a month," aKeystone worker wrote on a local web site