Now that July shredded scrap prices have settled at a $40-$50/long ton drop, US domestic wire rod mills are expected to let transaction prices slip by at least half of that decline. Sources tell SteelOrbis that even though scrap prices have decreased significantly the last two months in a row, mills cannot afford to let wire rod prices fall by the full amount as demand remains lackluster and order books are not full. In the last week, purchasing activity has been especially quiet, as buyers waited for scrap prices to settle and mills to respond. Without an official word from the mills as of Tuesday, US domestic wire rod spot prices remain in the range of $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) ex-mill.
Import prices have also held steady in the last week, although traders report that interest in imports is low, especially Turkish wire rod, which stands at the same price level as US domestic spot prices right now: $33.00-$34.00 cwt. DDP loaded truck in US Gulf ports. Considering that US prices will certainly drop in the next week or two, US buyers have little to no interest in future arrivals that don't seem to be downtrending in price anymore. Chinese wire rod offer prices, on the other hand, are still in the attractive range of $31.50-$32.50 cwt. ($694-$717/mt or $630-$650/nt) DDP loaded truck in US Gulf ports, and sources tell SteelOrbis that there is still decent inquiry activity on the Chinese front. Chinese wire rod has continued to pour into US ports: US import data reveal that 14,984 mt of wire rod was imported into the US from China in June (license data), compared to a paltry 3,977 mt from Turkey--traders expect the trend to continue in July results.