US wire rod market – More increases expected

The pricing trends for both domestic and import wire rod offers in the US are still headed up, though no major changes have been observed in the market since the previous week. While Keystone Steel & Wire announced it will raise its wire rod prices an additional $30 /nt in April by reinstating a scrap surcharge of $70 /nt and rescinding the previously announced increase of $40 /nt, other mills have not yet announced similar increases. The increase will most likely go through, but for now, most offers on the market do not reflect Keystone's increase. Most domestic low carbon wire rod offers in the market still range from $28.00 cwt. to $29.00 cwt. ($617 /mt to $639 /mt or $560 /nt to $580 /nt) FOB mill. High carbon ranges from $30.50 cwt. to $31.50 cwt. ($672 /mt to $694 /mt or $610 /nt to $630 /nt) FOB mill. Sources say that, like domestic flat rolled market, the recent price increases for wire rod are mostly cost-driven,and that wire demand still isn't that strong. But due to surging scrap prices, the pricing trend for domestic wire rod is still up. The pricing trend for import wire rod is strongly up, also due to cost factors. However, most offers on the market are still at the same range as last week. Turkish offers are still priced out of the market, and are even higher than domestic offers. China remains the largest import source for wire rods, with offers for the US that continue to reflect China's strong domestic wire rod and raw materials markets. Mesh quality wire rod imports to the US now range from $26.75 cwt. to $27.75 cwt. ($590 /mt to $612 /mt or $535 /nt to $555 /nt) FOB, loaded truck, in US Gulf Ports. Drawing quality imports continue to range from $28.50 cwt. to $29.50 cwt. ($628 /mt to $650 /mt or $570 /nt to $590 /nt) FOB, loaded truck, in US Gulf ports. This week, the latest rumor is that the Chinese government's VAT rebate reduction on long products will occur on April 1, though existing contracts may be exempt or a grace period may be given before the rebate is reduced to zero from 8 percent. After the rebate is eliminated, the Chinese government may be somewhat successful in its goal to discourage the exporting of basic products like wire rod and rebar. However, US wire rod buyers will continue to share the cost of the rebate with Chinese mills as long as demand remains strong.