Market sources concur that the domestic mills' announced increase of $55 /nt ($61 /mt or $2.75 cwt.) has not yet gained market acceptance; however, most still agree that at least some of the increase will soon take hold.
Smaller buyers will have no choice but to pay the higher prices announced for May shipments, but large buyers are still reportedly able to get deals for under $29.00 cwt. ($640 /mt or $580 /nt).
The downstream market for wire products is still not very strong, and US wire plants are currently working at less-than-full capacity. Nevertheless, mills have been firm in their stance to raise prices, as they need to recoup their raw material costs in order to remain profitable. Scrap prices decreased in April, and many wire rod buyers are hesitant to place orders since there is a good chance that prices could decrease again. However, the scrap used to make the products that will be shipped in May was purchased while scrap prices were at their peak. Therefore, domestic wire rod offers will register some increase in May, so the pricing trend remains strongly up for the time being.
For now, most offers for domestic low carbon rod continue to range from $29.00 cwt. to $30.00 cwt. ($640 /mt to $661 /mt or $580 /nt to $600 /nt) FOB mill. High carbon offers still range from $31.50 cwt. to $32.50 cwt. ($694 /mt to $717 /mt or $630 /nt to $650 /nt) FOB mill.
Import prices also have not changed from the previous week, with import mesh offers continuing to range from $27.00 cwt. to $28.00 cwt ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB, loaded truck, in US Gulf ports. Drawing quality offers continue to range from $28.75 cwt. to $29.75 cwt. ($634 /mt to $656 /mt or $575 /nt to $595 /nt) FOB, loaded truck, in US Gulf ports.
The pricing trend for import wire rod remains up because Chinese mills have had higher price expectations since the VAT rebate was eliminated earlier this month. Also, as we mentioned last week, demand for wire rod in Europe is still robust, so most Chinese rods are finding homes in the higher-paying European market instead of in the US. Furthermore, indications are that the Chinese rod market remains moderately strong.