Although Nucor released a wire rod price increase earlier today, sources are already telling SteelOrbis they are skeptical of its chances of absorbing into the market, even if other mills follow suit. The increase, of $1.00 cwt. ($20/nt or $22/mt) effective immediately with new orders, is viewed by many as “interesting” considering the slight drop in scrap prices this month and ample availability of import positions (US import license data show 180,762 mt in import permits for May).
US domestic wire rod mills have been keeping spot prices “on a short leash” lately, according to sources, even though the $10-$15 per ton drop (depending on the region) in shredded scrap prices left wire rod prices vulnerable to deals. At the very least, the most immediate impact of today’s price increase will be to “clean up” dealmaking in the market, although the possibility of spot prices rising overall remains to be seen.
Sources tell SteelOrbis that any traction on the increase might have to wait until the results of the Section 232 investigation are released, a major market development due sometime this month. If the results end up favoring US domestic wire rod mills, sources say buyers can expect “immediate” enforcement of the increase, plus more, “if mills are so inclined.”