In response to the moderate drop in shredded scrap prices, domestic wire rod mills will likely keep transaction prices level.
Although expectations for February's scrap price decrease remained, up until the end of last week, in the range of $20-$30/long ton, shredded scrap only came down by a meager $15/lt on Monday. Even at previously predicted levels, US wire rod mills were not expected to translate the lower raw material costs into lower rod prices; no announcements have been made yet, but it is nearly certain that wire rod prices for March shipments will not change from official February prices.
Unfortunately, such a decision will not do much to help firm up spot prices in the domestic market. Already, mills have found resistance to the $3.75 cwt. ($83/mt or $75/nt) increase announced for February shipments. If mills had succeeded in pushing through the full increase, prices would be in the range of $39.25-$40.25 ($865-$887/mt or $785-$805/nt) ex-Midwest mill. But as it is, spot prices are closer to the range of $36.50-$37.50 cwt. ($805-$827/mt or $730-$750/nt) ex-Midwest mill, which is only $1.00 cwt. ($22/mt or $20/nt) over pre-increase (early January) official asking prices. So far, predictions for March scrap pricing point to a slight increase--if that expectation holds throughout this month, mills might have a better shot at firming up spot prices. But last month, scrap expectations for February turned on a dime, so a clear picture will not be available until the end of the month nears.
As for imports, the local Turkish wire rod market has softened slightly in the last week, but sales prices in the US have not reflected the change quite yet. The current price range for Turkish wire rod, $35.50-$36.50 cwt. ($783-$805/mt or $710-$730/nt) duty paid FOB loaded truck in US Gulf ports, could drop slightly in the near-term, but for now, US-based traders are trying to keep import prices firm and are not offering anything for less than $35.50 cwt.