Lackluster demand in the present and uncertainty about demand in the future has left the US domestic wire rod market trending neutral this week, with sources speculating that mills have officially given up on pushing through the $2.25 cwt. ($45/mt or $50/mt) price increase scheduled to take effect May 1.
Although many in the market were optimistic about economic prospects that could boost the sector, including infrastructure spending and incentives for manufacturing companies, sources say optimism is starting to wane as it appears the Republican-controlled Congress’s legislative agenda is “going nowhere fast,” according to one source.
Without hopes for demand-boosting government initiatives or intervention, US domestic wire rod mills are relying chiefly on raw material costs and import competition to drive price policies. Currently, US domestic scrap prices are pointing to another mostly-sideways trend next month, while new import wire rod sources are starting to take hold in the market after an AD/CVD investigation was launched against producers in 10 countries—essentially leveling out the impact of the investigation.