While domestic wire rod prices seemed to be softening last week, the US holiday season has stalled any significant movements in the market.
Skepticism regarding the $3.00 cwt. ($66/mt or $60/nt) increase announced by US wire rod mills in early December has seemed to subside--spot prices are no longer softening, and the likelihood that mills will raise prices again next month is getting stronger. Operating at roughly 60 percent capacity, domestic mills are nearly full for January orders, and even though there hasn't been significant purchasing activity in the last week due to the US holiday season, spot prices have firmed up to $34.00 cwt ($750/mt or $680/nt) ex-Midwest mill and above, getting closer to official asking prices of $35.50-$36.50 cwt. ($783-$805/mt or $710-$730/nt) ex-Midwest mill.
All signs are still pointing to a $40-$50/long ton increase in shredded scrap in January, which will likely result in wire rod increases to match. However, an upcoming development could influence domestic mills' plan for February pricing: the reopening of ArcelorMittal's Georgetown mill. Although an official date has not been announced, recent news reports have pointed to production resuming in January. The additional supply in the market (Georgetown's pre-shutdown annual capacity was 750,000 nt) could bring some competition into the market, especially if the mill attempts to regain market share by offering exceptionally low prices, as some industry insiders suspect.
As for imports, wire rod offers from Turkey rose slightly in the last week as predicted, by about $0.50 cwt. ($11/mt or $10/nt). Prices are now in the range of $33.50-$34.50 cwt. ($739-$760/mt or $670-$690/nt) duty paid FOB loaded truck in US Gulf ports, with most offers falling in the middle. However, purchasing activity is just as static in the import market as the domestic market, with upticks expected after the first of the year.