As the scrap forecast for February starts to point downward, there's not much concern that mills will make major adjustments in March pricing.
Last week's rumor that shredded scrap would drop by around $30/lt has picked up some steam, however, the drop in raw material costs will probably not make much of an impact in the US wire rod market. Even though mills had recently encountered resistance to their price increases, the push-back was due to what customers perceived as overshooting the market (when mills set February prices, scrap was expected to trend up until at least March). But it has become apparent that domestic wire rod supply is relatively tight at the moment--many major US mills have redirected production to other, more profitable products. Supply could loosen in the next couple months, as rod from the recently-reopened ArcelorMittal mill in Georgetown, South Carolina starts flowing tonnage into the market.
But until then, there is a strong chance that mills will drop the raw materials surcharge (RMS), but keep base prices level, if scrap drops to predicted levels this month. For now, spot prices have continued to adjust slightly downward, into the range of $36.50-$37.50 cwt. ($805-$827/mt or $730-$750/nt) ex-Midwest mill, reflecting a decrease of $0.50 cwt. ($11/mt or $10/nt) since last week.
As for imports, Turkish wire rod prices have remained level in the last week, even though scrap prices in Turkey have dropped somewhat. However, even at steady prices of $35.50-$36.50 cwt. ($783-$805/mt or $710-$730/nt) duty paid FOB loaded truck in US Gulf ports, the spread between import and domestic offers is not wide enough to garner any activity.