Buoyed by the tightening supply lines, US domestic wire rod prices have inched up by about $1.00 cwt. ($22/mt or $20/nt) within the last week.
Domestic low carbon wire rod offers now range from $26.50 cwt. to $27.50 cwt. ($584 /mt to $606 /mt or $530 /nt to $550 /nt) FOB mill. The reason for the increase is thought to be several-fold – two major US rod mills going offline, lack of imports, and the rise in US scrap prices this month are all cited as reasons for domestic rod's slightly upward price momentum.
Actual demand for wire rod has not improved markedly, but mills have reportedly been getting a decent amount of orders as customers are starting to think about shoring up their future supplies ahead of any possible shortage. Wire companies' business remains soft, but they want to make sure that they don't get caught without any raw material supply, or are forced to buy higher-cost supply, once the market heats up again.
Meanwhile, US shredded scrap prices are projected to increase by $25 to $50 /ton this month, which, combined with the supply worries, may help boost domestic wire rod prices further this summer.
On the import side, Turkish offers haven't budged since last week, although very few new orders are being placed as the price gap between import and domestic material is too narrow to be advantageous for US buyers. Still, the Turkish mills are aware of the tightening supply situation in the US and are seeing decent demand from other regions, so they are unwilling to lower their prices for the time being. Most mesh quality offers of Turkish material continue to range from approximately $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) duty-paid, FOB loaded truck in US Gulf ports.
License data collected through June 30 show that US wire rod imports totaled approximately 38,701 mt in June, which is an increase from May, due largely to a 10,425 mt increase of Venezuelan imports in June (compared to 0 mt from Venezuela last month). Wire rod imports from the United Kingdom also increased significantly in June, rising from 208 mt in May to 3,730 mt in June. Other top wire rod import sources in June were Canada (15,576 mt); Japan (3,022 mt) and Brazil (3,010 mt). Notably, the top wire rod import sources in June are largely high carbon rod suppliers, and the license data reflect zero wire rod imports in June from the main low carbon rod suppliers, Turkey and China.
