Spot prices for domestic wire rod have stabilized for the moment, as end-users express concern about their ability to absorb the February price increase.
While last week's price increase announcement from major US wire rod mills was at first met with rising spot prices, the upward trend has stalled. Sources tell SteelOrbis that end-users in the domestic wire market are concerned about their ability to pass higher prices onto their own customers, leading to a growing uncertainty about how much of the $3.75 cwt. ($83/mt or $75/nt) increase mills will be able to pass through.
The lull in rising spot prices will not last long, however. Another increase in shredded scrap prices is expected in February (although not by as much as January's increase), which will help bring spot prices closer to mill asking prices for February shipments. Mills might very well raise transaction prices again next month, but if they do, the increase will probably be marginal. For now, spot prices are still in the range of $37.50-$38.50 ($827-$849/mt or $750-$770/nt) ex-Midwest mill.
Even if February proves to be a relatively strong month for prices, many in the industry expect prices to start softening in March. This expectation has led to a slowdown in import inquiries in the last week-US customers are not too interested in buying at current import prices if there's a good chance domestic prices will come down in a few months. Therefore, Turkish mills have not changed their offers, which are still in the range of $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) duty paid FOB loaded truck in US Gulf ports.