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Different twists for wire rod: while domestic mills seek trade relief from "unfair" imports, domestic users of wire rod products fear a potential shortage of supply.

Article Excerpt
IN A TIME WHEN MOST other steel-makers are doing quite well, North American producers of carbon and alloy steel wire rod have continued to struggle. The problem, mill executives say, is not so much the underlying demand, but the burgeoning import penetration that has limited their ability to raise prices to cover increased operational costs.

"Wire rod has been the most dysfunctional sector in the steel industry" says Christopher Plummet, managing director of Metal Strategies Inc., West Chester, Pa. "It has been one of the most fragmented of the steel sectors, and there has been a lot of distress."

Domestic producers are hopeful that recent trade action against three major wire rod importing countries will allow them to recover some profitability. But some of their customers question this move, maintaining that it could decimate the North American wire and wire products industry, which is itself fighting tooth and nail against imported product.

"It is hard to get a clear picture of demand for wire rod because there have been a number of disruptions as far as supply" says Philip Casey, president and chief executive officer of Gerdau Ameristeel, Tampa, Fla. For one, Gerdau's Beaumont, Texas, rod mill, which it acquired last year from North Star Steel, has been shut down since May 26 due to a labor lockout.

In addition, a lengthy strike at Heico Cos. LLC's L'Orignal, Ontario, wire rod and steel billet mill (formerly owned by Ivaco Rolling Mills), has taken an estimated 100,000 tons a month (or about 1.2 million tons a year) of wire rod production out of the market. The Heico mill hasn't totally ceased production, but reportedly is meeting some of its customer requirements by tolling through other rod mills.

The situation is further muddied by what seems to have been a strong inventory buildup at both service centers and wire drawers. "Because of the shortages in...

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