US wire rod market remains quiet going into the holidays

After mills announced a January price hike last week, the US wire rod market has remained very quiet in the week leading up to Christmas.

Although US wire rod spot prices moved up by about $1.00 cwt. ($22/mt or $20/nt) last week following producers' raw materials-based January price increase announcement, offers have yet to rise by the full $65/nt ($72/mt or $3.25 cwt.) mills are asking for. Not much activity is expected to transpire this week or next because of the holidays, and most buyers and sellers of wire rod alike are waiting until after New Year to see how things shake out. US scrap prices are expected to rise further in January, which may help producers to push through the $65/nt hike. However, as long as demand remains weak, producers will face an uphill battle to push up transaction prices strongly, even if raw material costs keep rising.

This week, most low carbon offers from US mills remain at a range of approximately $28.50 cwt. to $29.50 cwt. ($628/mt to $650/mt or $570/nt to $590/nt) ex-mill.

The import rod market in the US remains similarly quiet, as Turkish mills are still angling for higher prices but most buyers aren't looking to purchase anything right now. This disconnect between US rod buyers' and offshore mills' price expectations will likely continue until US domestic prices rise further, or companies  start to run low on rod inventory, or both. Some customers only have enough inventories to last through January or February, and these buyers will need to return to the market sooner, rather than later. However, buyers will likely continue to source most of their rod domestically in the near-term in order to minimize their risk.

Most Turkish offers of mesh quality rod to the US continue to range from approximately $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) duty-paid, FOB loaded truck in US Gulf ports.

Meanwhile, China remains out of the market, as offers in the US are too low currently to generate any interest from the Chinese mills and they are not willing to offer competitively. This leaves Turkey as the primary offshore source.