As expected, US domestic wire rod mills succeeded in pushing through the last $0.50 cwt. ($10/nt or $11/mt) of the transaction price increase announced for December orders. Higher than anticipated scrap prices this month have bolstered mills’ leverage, even though demand remains lackluster. The second announced increase, for January orders, is next up to bat, although sources tell SteelOrbis that mills are only expecting to get $1.00 cwt. ($20/nt or $22/mt) of the $1.25-$1.50 cwt. ($25-$30/nt or $28-$33/mt) increase, and it’s likely that it will take weeks of small upticks to reach it. On the other hand, some sources are predicting that mills will soon announce another wire rod price increase for February orders to strengthen their position and get more of the January increase faster. And depending on how successful that strategy goes, they might even push for the final $0.25-$0.50 cwt. ($5-$10/nt or $5.50-$11/mt). Until then, US domestic wire rod spot prices are now in the range of $33.50-$34.50 cwt. ($670-$690/nt or $739-$761/mt) ex-mill
Import offers from China, meanwhile, are unchanged in the range of $28.50-$29.50 cwt. ($570-$590/nt or $628-$650/mt) DDP loaded truck in US Gulf ports, although traders tell SteelOrbis that most transactions are taking place in the middle to high end of the range. However, this does not exactly indicate an uptrend for Chinese wire rod prices--traders can reportedly book slightly lower at the CFR level if they offer an “interesting quantity”. Rather, the range firming is attributed to the uptrending US domestic market--if US customers are paying more for domestics, traders are figuring they’ll pay a bit more for imports as well. So far, their theory is paying off.