After weeks of downward pressure, US wire rod prices have finally started to soften.
One of the scenarios presented last week regarding US wire rod mills' response to the imminent sideways scrap move was that they would not change official asking prices, but spot prices would nevertheless soften due to tepid demand levels. Shredded scrap prices in the Midwest indeed followed a neutral trend (according to SteelOrbis' scrap index), and as such, US domestic wire rod spot prices have dropped approximately $0.50 cwt. ($11/mt or $10/nt) in the past week.
New spot prices, now ranging from $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) ex-Midwest mill, might still be too hard to swallow, however, and sources tell SteelOrbis that there is a strong indication the price slip will continue, bit by bit, at the very least until raw material prices are back on the rise. Early speculation for September shredded scrap pricing is currently pointing to a sideways to slightly uptrend, and if the predictions prove to be true (early expectations have been rather accurate the last few months), wire rod mills might finally be able to gain some of the ground they have lost as of late.
Fortunately, US mills still don't have import competition to worry about, even though wire rod prices from Turkey are also beginning to soften. Turkish wire rod offers came down approximately $0.50 cwt. ($11/mt or $10/nt) in the last week, but new offers in the range of $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) DDP loaded truck in US Gulf ports are still nowhere near attractive enough for US buyers to care. However, as with US domestic spot prices, Turkish import offers also seem to be on a downward trend, resulting in a race of sorts--who will drop prices faster to levels amenable to US domestic tastes?
