Instead of fully accepting last week's price decrease for domestic wire rod, customers have interpreted the move as a sign that pricing is wide open for negotiation.
Domestic mills are still offering wire rod at the same price as last week, in the range of $30.50 cwt. to $31.50 cwt. ($672/mt to $694/mt or $610/nt to $630/nt) ex-mill, and many customers have been able to make considerable deals, even, on occasion, for orders without abundant tonnage. While mills aren't expected to "officially" lower wire rod prices again anytime soon, they might be able to get a firmer grasp on current prices if speculation of a sideways to upward scrap price movement in August comes to pass.
As mentioned last week, demand for wire rod has slowed recently, due to previously strong end-use sectors feeling the effects of the frustratingly slow economic recovery. Automotive demand has weakened, and now the outlook for appliances is not as rosy as before. Whirlpool Corp., the world's largest appliance maker, reported second quarter profit and increased sales, yet stated in a conference call last week that demand will slow in North America and Latin America for the remainder of the year. According to Marc Bitzer, President of Whirlpool's North American operation, the company expects a "moderating growth rate" in the US due to "a lack of inventory rebuilding at retailers and the end of the appliance rebate program."
Although the domestic wire rod market is currently experiencing a downward trend, the market overseas is trending up. In Europe, scrap prices fell slightly, causing scrap buyers who haven't purchased large quantities in a while-Turkey in particular-to get back in the market. As a result of this mad dash for scrap, demand is on the rise and prices will soon follow. Local wire rod prices overseas are stable for now, but price increases for imported wire rod are expected as early as next week. For now, wire rod from Turkey is still offered in the range of $28.50 cwt. to $29.50 cwt. ($628/mt to $650/mt or $570/nt to $590/nt) duty paid, FOB loaded truck in US Gulf ports.
