Although shredded scrap prices did not plunge as much as the worst predictions held, a $20-$30 per ton dip (depending on the region) has put added pressure on the US domestic wire rod market, which is already “rife with dealmaking” according to sources. This week, spot prices have dropped by another $0.50 cwt. ($10/nt or $11/mt) into the range of $27.00-$28.00 cwt. ($540-$560/nt or $595-$617/mt) ex-mill, although sources tell SteelOrbis that the range is nowhere close to firm.
The only bright spot in the US domestic market is the absence of significant competition from imports. While import offer prices are continuing to tick down as well, demand for future arrivals is scant and position availability is drying up—according to US import data, import permits for wire rod totaled 136,333 mt in May, while June permit levels have only reached 53,751 mt as of the middle of the month. There is little chance the June total will catch up to May, and after traders work through stock that arrived last month, customers are expected to turn more to the domestic market rather than hedge their bets with future import orders.