After US domestic wire rod mills announced an unexpected $1.50 cwt. ($30/nt or $33/mt) price increase nearly two weeks ago, sources told SteelOrbis they were skeptical about the prospect of any of it absorbing into the market. Since then, US wire rod buyers have reportedly continued to resist the increase, leaving spot prices level at $39.00-$40.00 cwt. ($860-$882/mt or $780-$800/nt) ex-mill.
Sources say the timing of the increase announcement is “suspicious,” considering lackluster demand in the wire rod market and prices that are much higher year-on-year. In late November 2017, US domestic wire rod prices were trending at $31.00-$31.50 cwt. ($620-$630/nt or $683-$694/mt) ex-mill. One source speculated that mills are trying to “keep a firm grasp on prices” in the increasingly likely event Canada and Mexico are granted exemptions from Section 232 tariffs.
Although Mexican wire rod is currently subject to AD/CVD duties slightly less than the 25 percent Section 232 duty, sources say granting the country an exemption to the sweeping tariffs could “open the door” to more exemptions from major sources of US import wire rod, particularly from the European Union.