Due to a combination of downtrending scrap prices and lackluster demand earlier this month, the February 1 effective date for the last announced US domestic wire rod price increase came and went without any change in prices. If anything, spot prices became more flexible and buyers were able to book substantial outlier deals. However, early predictions for a strong scrap price uptrend in March has led mills to give the February 1 increase—$2.25 cwt. ($45/nt or $50/mt)—another shot.
In a letter to customers last week, Nucor said it will implement its “February 2017 pricing” effective with shipments as of March 1. Sources say Nucor and other mills are hoping market conditions this time around will favor the increase, but aside from the scrap factor, sources say demand is still a concern.
“They can raise prices all they want,” said one source, “but if you’re not desperate for product, and they’re eager for orders, you can probably work something out.”
Another source noted that depending on the actual settled price increase for US domestic scrap in March, buyers might not have a choice. “Anything over $30-$35/ton up for scrap,” he said, “and mills won’t budge.”
For now, spot prices for US domestic wire rod are still in the range of $28.00-$29.00 cwt. ($560-$580/nt or $615-$637/mt) ex-mill, but while transactions at the top end of the range were scarce last week, this week transactions at the bottom end of the range are becoming limited to only the largest buyers.