US domestic wire rod offer prices are on the rise as mills try to push through their February price hikes. However, purchasing activity remains muted as many buyers doubt that the current price momentum will last.
After US mills announced price increases ranging from $50/nt to $60/nt ($55/mt to $66/mt or $2.50 cwt. to $3.00 cwt.) within the past couple weeks, offers have risen by an average of $1.50 cwt. ($33/mt or $30/nt). Most low carbon wire rod offers from US mills are now quoted at approximately $30.00 cwt. to $31.00 cwt. ($661/mt to $683/mt or $600/nt to $620/nt) ex-mill. There are still some deals for large buyers heard at under $30.00 cwt.; however, these offers are disappearing fast.
Producers are aware that they may only have limited success with their February price hike and may only achieve part of it, as they did with their January hike. The pricing trend is still slightly up, though the market seems to be looking for direction and few buyers are committing to the new domestic prices yet.
Since demand remains weak and the January and February US rod price hikes have been entirely cost-driven, some wire drawers have opted not to buy anything for the time being, or are only buying the bare minimum. The end-markets for mesh-grade applications (i.e. housing, infrastructure) still have a long and slow recovery ahead of them, and history tells that the scrap prices can reverse their course on a dime. Therefore, there is only limited confidence in the Q1 rod price hikes, and most rod buyers would rather play it safe until they start to see some demand improvements.
On the import side, Turkish mills raised their offers further in the past week to reflect the rising scrap prices and price increase announcements in the US. However, they are not having much success in booking at the new prices yet as traders see little room for profit in current mill offers. Traders are still struggling to sell Turkish rod at a range of $28.50 cwt. to $29.50 cwt. ($628/mt to $650/mt or $570/nt to $590/nt) duty-paid, FOB loaded truck in US Gulf ports, and the new offers would calculate to even higher sales prices. So, similar to the US market, while the price trend for import rod is also still slightly up, there remains very little activity on the sales side.
Item |
Spot price for US buyers |
From last week |
From last month |
Pricing Trend |
Comments |
$30.50 cwt. ($672/mt) |
Up $1.50 cwt. ($33/mt) |
Up $1.50 cwt. |
J |
Ex-US mill |
|
Import mesh-quality wire rod (Turkish origin) |
$29.00 cwt. ($639/mt) |
No change |
Up $2.50 cwt. ($55/mt) |
J |
Duty-paid, FOB loaded truck in US Gulf ports |