After the April 1 effective transaction price increase for US domestic wire rod was absorbed into the market without a hitch, more increases were predicted on the horizon, especially after shredded scrap prices saw an ample price bump this month. As such, mills have announced a $2.50 cwt. ($50/nt or $55/mt) transaction price increase for wire rod set to take effect on May 1. However, there has not been a flurry of buying activity ahead of the increase, as many would expect.
Part of the reason for the tepid response is the likelihood that scrap’s strong uptrend will not continue into May. The latest forecast shows a possible $10 per ton increase in shredded, but some predictions are holding at a neutral trend. However, sources tell SteelOrbis that mills are planning to hold firm once the effective date arrives, eager to mitigate losses from last year with higher margins this year. Already, the lowest end of the current spot range of $26.00-$27.00 cwt. ($520-$540/nt or $573-$595/mt) ex-mill is available to only the largest customers—most others, according to sources, are paying closer to the higher end.