After the surprise has settled over the announcement of a $2.00 cwt. ($40/nt or $44/mt) wire rod price increase for December shipments, sources tell SteelOrbis that the prospects of the increase absorbing into the market are “better than expected.” In the past, US domestic wire rod mills have announced substantial price increases that fell flat, but despite a “steady but not exciting” demand environment for wire rod and “decent but not too low” wire rod import offers, sources say the announced increase will most likely absorb fully, but “probably not right away.”
Instead, sources expect gradual absorption into market prices. Some sources think half of the increase will be implemented immediately while mills chip away at the other half for the remainder of the year, while other sources think equal portions will absorb in parts over a matter of weeks. Until the increase is effective, spot prices are still in the range of $24.00-$25.00 ($480-$500/nt or $527-$549/mt) ex-mill, with transactions already trending toward the upper end of the range.