Lackluster demand in the US wire rod market, combined with a narrow margin between import offers and US domestic spot prices, led many to expect a stable trend for US wire rod for the remainder of the year despite uptrend rumors in other long product markets. As such, many in the market were surprised by recent price increase announcements, which went far beyond announcements for more demand-heavy products like rebar.
This week, Nucor followed Gerdau with a $2.25 cwt. ($45/nt or $50/mt) wire rod price increase announcement, effective with shipments as of Jan. 2, 2018. In comparison, this week’s rebar price increases only totaled $1.25 cwt. ($25/nt or $28/mt). December shredded scrap prices, which saw a rise of around $30 per ton, are the primary reason behind the long product price increases, but sources are not sure the US wire rod market can support such a sharp uptick in prices.
With a less than a month before the increase takes effect, US domestic wire rod spot prices are stable this week in the range of $31.00-$31.50 cwt. ($620-$630/nt or $683-$694/mt) ex-mill. Sources tell SteelOrbis that it’s “very unlikely” the full amount will absorb into the market, although an eventual increase of around $1.00 cwt. ($20/nt or $22/mt) or slightly more is reportedly possible.