In the US domestic wire rod market, customers are still digesting the rash of major price increases announced by domestic mills in the last two weeks.
While Rocky Mountain Steel Mills upped their rod prices by $178 /nt ($196 /mt or $8.90 cwt.) by means of raising their energy surcharge and installing a raw materials surcharge, other mills such as Ivaco, Keystone, and ArcelorMittal Long Carbon North America, all raised their prices in two phases. Ivaco and Keystone will raise their prices by $75 /nt ($83 /mt or $3.75 cwt.) in April and by another $75 /nt in May, while ArcelorMittal's numbers will rise by $75 /nt in May and then by another $100 /nt ($110 /mt or $5.00 cwt.) in April. So in total, domestic wire rod prices on the whole are set to increase by $150 /nt ($165 /mt or $7.50 cwt.) to $178 /nt by the beginning of May.
The numerous price increases, if accepted, will push domestic low carbon rod to a price range of $47.00 cwt. to $49.00 cwt. ($1,036 /mt to $1,080 /mt or $940 /nt to $980 /nt) ex-mill, while high carbon would range from $49.50 cwt. to $51.50 cwt. ($1,091 /mt to $1,135 /mt or $990 /nt to $1,030 /nt) ex-mill. For now, however, spot prices for domestic low carbon range from $43.50 cwt. to $44.50 cwt. ($959 /mt to $981 /mt or $870 /nt to $890 /nt) FOB mill, while high carbon spot prices range from $46.00 cwt. to $47.00 cwt. ($1,014 /mt to $1,036 /mt or $920 /nt to $940 /nt) FOB mill.
There is a good chance that due to the tight supply situation in the US wire rod market that the full extent of these increases will go through. Whether customers will accept the increases in full, or whether they will possibly draw the line and refuse to pay the higher numbers will become evident in the next week or so. The domestic pricing trend remains slightly up, as spot prices are highly expected to rise above the current price level even if they do not rise by the full amount mills are asking for.
On the import side, the pricing trend is also still pointing in an upward direction; however, there are signs that the market is close to peaking. Offering prices from Turkish mills have remained unchanged in recent weeks, following weeks of rallying. Also, the current offering level for mesh-grade rod from Turkish mills, which is $50.00 cwt. to $51.00 cwt. ($1,102 /mt to $1,124 /mt or $1,000 /nt to $1,020 /nt) FOB loaded truck, in US Gulf ports, still has not found any major acceptance in the US market. However, if US rod prices keep rising and the supply shortage becomes more severe, these Turkish offers may start to look more attractive. Therefore, there is probably still some more room for Turkish import rod prices to rise.
SteelOrbis has heard of some scattered Chinese offers, but they have very short validities and severe size and grade restrictions. Offers heard recently for certain low carbon grades (1008 or 1010) range from $47.00 cwt. to $48.00 cwt. ($1,036 /mt to $1,058 /mt or $940 /nt to $960 /nt) FOB loaded truck in US Gulf ports. The 5.5 mm size, a popular mesh quality wire rod size, is severely restricted. The existing offers are very scarce, although some traders have already committed and bought at these levels. After the short booking window for these offers closes, prices from China are generally expected to continue traveling upwards in the coming weeks.