Now that the $25/nt ($1.25 cwt. or $28/mt) transaction price increase for US domestic wire rod announced last month has been fully absorbed into the high carbon market, buyers are pondering how long the uptrend can last. Scrap prices fell this month and early predictions point to another soft scrap trend in March, which will remove much of domestic mills’ leverage in announcing further increases.
On the other hand, domestic competition from imports could be impacted by the newly-filed trade case against wire rod from China. Sources tell SteelOrbis that they expect Chinese imports to dry up in anticipation of a negative ruling, and while they would certainly look to alternative offshore sources, how much they order--if at all--will depend on the margins between alternative import offers and US domestic spots prices. If the margins aren’t wide enough to justify the large scale orders necessary for imports, they will stick with domestics, which could bolster US mill attempts at another increase, regardless of the scrap trend.
For now, US domestic prices for 1050/1060 grade high carbon wire rod are now in the range of $34.25-$35.25 cwt. ($685-$705/nt or $755-$777/mt) ex-mill, while 1070/1080 grade prices are at $37.25-$38.25 cwt. ($745-$765/nt or $821-$843/mt) ex-mill.