US wire rod market likely to accept price increase

Import wire rod offering prices to the US have increased by $0.25 cwt. ($5.50 /mt or $5 /nt) in the past week as the market continues its strong upward trend. Import mesh wire rod offers now range from $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) FOB, loaded-truck, in US Gulf ports. Drawing quality offers still range from $25.50 cwt. to $26.50 cwt. ($562 /mt to $584 /mt or $510 /nt to $530 /nt) FOB, loaded-truck, in US Gulf ports. Chinese mills are offering a small discount for Chinese grades and for sizes 6.5 mm and larger. The import wire rod market has continued to heat up because of price hikes from the Chinese mills. Chinese domestic mesh grade rod prices have risen approximately $20 /mt to $30 /mt ($18 /nt to $27 /nt or $0.91 cwt. to $1.36 cwt.) in the past week, and these increases will eventually be passed on to their American customers. Drawing quality rod prices have not increased yet, but they are expected to rise within the next several weeks. As SteelOrbis reported last week, domestic wire rod producer Gerdau Ameristeel has announced that it will increase its wire rod prices by $30 /nt ($33 /mt or $1.50 cwt.) for March shipments. While it is too soon to say with certainty that the market will accept the increase, in all likelihood, the $30 /nt increase (or at least a large portion of it) will go through and other mills will follow with similar price increases in the coming weeks. Some mills believe a $30 /nt increase is a bit aggressive and that a $20 /nt increase is more realistically obtainable from high inventoried wire customers. In the US, wire rod demand is not as good as the demand for rebar. However, the pricing trend for domestic wire rod is now strongly up, the reason being that the price increases of Gerdau and the other domestic mills are likely to be accepted as raw material costs and import prices are both going up. Sources say that the Mexican wire rod market is also heating up along with the US market. For now, domestic prices still range from $24.50 cwt. to $25.50 cwt. ($540 /mt to $562 /mt or $490 /nt to $510 /nt) FOB mill for low carbon, and from $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB mill for high carbon.