Quiet US wire rod market cautiously optimistic for post-holiday price recovery

Another quiet week has passed for the US wire rod market. However, there is still an expectation that domestic prices will rise in the first weeks of the New Year.

In addition to the already-announced $65/nt ($72/mt or $3.25 cwt.) January price increase for domestic rod which has not yet been fully realized, US scrap prices are expected to see another decent-sized increase in January, which is expected to spur further price hikes for rod early in the New Year. Therefore, although spot prices haven't moved since last week, the overall price trend for US domestic wire rod remains up.

For now, most low carbon domestic offers continue to range from approximately $28.50 cwt. to $29.50 cwt. ($628/mt to $650/mt or $570/nt to $590/nt) ex mill.

Price increases are also expected in the import wire rod market, as scrap prices in Turkey continue to be high. It being the last week of the year, few US rod traders are currently asking for serious offers from Turkey, but once the market gets going again with some degree of activity, new offers are expected to be at least $0.50 cwt. ($11/mt or $10/nt) higher than current levels.

For now, most mesh-grade import wire rod offers from Turkey continue to range from approximately $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) duty-paid, FOB loaded truck in US Gulf ports. The price trend for import rod is strongly up.

Chinese offers remain uncompetitive and are not expected to return to the US market with realistic offers until at least after the Chinese New Year. However, if business in China's steel markets remains as strong as it has been, then we may not see Chinese offers in the US market for some time.

Despite the lack of import offers, tightly controlled domestic production and raw materials-based price hikes on both the import and domestic ends, wire rod's end-use markets in the US continue to struggle, and this lack of demand may prevent a strong up-tick in US rod prices from occurring in the near-future, especially if wire drawers are unable to pass through their raw material cost hikes to customers.