Wire Rod licenses as of July 7th totaled 15,618 tons, plummeting 92% month on month (m/m). In April, May and June licensed tons were 176,963, 219,981 and 194,093 tons respectfully. On a year to date (YTD), y/y basis license volume was flat at 1,102,641 tons in 2017 vs. 1,101,569 tons in 2016.
Figure 1 shows total Wire Rod licenses through July for both 2016 and 2017 as well as the average unit value (AUV), as reported by the Steel Import Monitoring System (SIMA). Prices as depicted by the light-blue line had been trending gradually higher since the beginning of the year before spiking to $771 per ton, up $193 per ton m/m.
Figure 2 charts the YTD total by country for 2016 and 2017. Canada’s license requests through July 7th totaled total 293,242 tons down 45,947 tons YTD y/y, (-5.5%). Canada has only requested 593 tons (-98.7%), of licenses thus far in July, down from the April, May and June average of 49,378 tons. Japan’s YTD date license requests stood at 160,954, down 23,039 tons y/y or -13.1%. For July, Japan’s requests fell to 8,725 tons (-71.2%), down from the April, May and June average of 26,072 tons. Ukraine’s license requests YTD were 104,439, up 9,368 tons YTD y/y, (9.9%). So far in July Ukraine’s has not asked for any tons, down from the April, May and June average of 12,813 tons. Turkey YTD date license requests stood at 103,877, up 41,367 tons y/y or 66.2%. For July Turkey has not asked for any tons, down from the April, May and June average of 20,810 tons.
Brazil was the next largest exporter with 87,735 tons YTD, up from YTD 2016 level of 53,616 tons, (+63.6%). July license requests total fell to 3,630 tons down from the April, May and June average of 15,857 tons.
So far in 2017 Russia has licensed 51,202 tons compared to 52,946 tons for the first seven months of 2016, down 3.3% YTD y/y. Russia has not asked for any tons for July, down from the April, May and June average of 6,964 tons.
The next nine largest exporting countries, (Korea, Germany, Spain, Mexico, UK, Belarus, Italy, South Africa and the UAE) of wire rod to the US combined to ship 287,598 tons YTD in 2017, up 14.3% from 251,434 tons YTD in 2016. The combined license requests through July 7th was for 2,506 tons down from a combined April, May and June average of 59,524 tons.
Clearly most of these countries are being very cautious as they await the recommended actions from the section 232 investigation on the effect of imports of steel on U.S. national security
Initiated by the Trump administration on May 24th of this year.
At Gerdau we closely follow trade in long products steel since it has a profound impact on domestic market share and material pricing. We want you, our valued customers to have access to current information that can help you better plan and operate your businesses.