Low-priced imports continue to pressure US wire drawers: Insteel

Insteel Industries' shipments during the company's fiscal first quarter rose 12% year over year, however the increase was offset by a 16% drop in average selling prices amid low-priced import competition, the US-based wire drawer said Thursday.

As a result of the lower pricing environment in the US, Insteel reported net income of $600,000 on sales of $97.6 million for the three months that ended December 28. This compares with net income of $4.1 million on sales of $104.1 million in the same period a year ago, reflecting a 6% year-over-year decline in sales.

Imports remained at elevated levels in a number of Insteel's markets during the quarter as international competitors have continued to increase their production of downstream products, such as PC strand and standard welded wire reinforcement, in order to circumvent the Section 232 tariffs on imported steel, Insteel CEO H.O. Woltz said during a conference call with industry analysts Thursday.

Looking ahead, Woltz said Insteel's business should benefit from the expected growth in infrastructure construction, driven primarily by higher state and local spending.

Additionally, US prices for wire rod – Insteel's main raw material – seem to be showing signs of recovery

Transaction prices for domestic wire rod were heard recently to be gaining traction after three rounds of mill-announced increases in as many months, starting in mid-November, when mills independently announced $25/st hikes on wire rod. This was followed by a $40/st increase in December and a $30/st increase announced in January.

S&P Global Platts' weekly Midwest wire rod assessment stood at $600-$625/st ex-works on January 10, the date of the most recent weekly assessment. This compares with a 2019 low of $560-$600/st in late November.