Even though the full amount of last week’s $2.50 cwt. ($50/nt or $55/mt) price increase for US domestic wire rod has not yet absorbed into the market, bullish mills have already announced another price increase to be effective June 1. On Monday, Gerdau announced a $2.00 cwt. ($40/nt or $44/mt) increase, followed by Nucor’s announcement on Tuesday that varied the increase by grade: low carbon wire rod will increase $1.00 cwt. ($20/nt or $22/mt) and high carbon will increase $1.50 cwt. ($30/nt or $33/mt). Today, sources tell SteelOrbis that Keystone Consolidated has matched Gerdau’s $2.00 cwt. price bump.
However, not everyone in the market is optimistic about the success of these recent increases, as current spot prices are still about $0.50 cwt. ($10/nt or $11/mt) shy of the full increase amount. This week’s spot range, at $28.00-$29.00 cwt. ($560-$580/nt or $617-$639/mt) ex-mill, is up $0.50 cwt. from last week, but sources say that has more to do with mill firmness than a surge in demand. But with import offers slipping and early scrap predictions pointing to a likely sideways trend in June, mills are losing much of their leverage.
As such, sources say mills will likely secure the final $0.50 cwt. of last week’s increase sometime during the remainder of this month, but the viability of the June 1 increase is still in question. Scrap prices will be the most influential factor, sources say, but because the situation is not quite clear, customers are reportedly holding off on making “pre-increase” buys.