Turkish wire rod offers to the US have increased in the last week, while domestic prices seem to be on the brink of an uptrend.
Indications of a strengthening domestic market in Turkey have increased wire rod offers to the US in the last week, by about $1.25 cwt. ($28/mt or $25/nt). New price levels are in the range of $36.75-$37.75 cwt. ($810-$832/mt or $735-$755/nt) duty paid FOB loaded truck in US Gulf ports, with the strong possibility that prices could rise to the $38.00 cwt. ($838/mt or $760/nt) level soon. Another reason behind the uptrend is what has been described to SteelOrbis as a "perceived shortage" of wire rod in the US.
That same alleged shortage has also brought US domestic wire rod prices to the brink of an uptrend. Although prices have not changed since last week, there are strong indications that current spot prices in the range of $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) ex-Midwest mill could rise by approximately $1.00 cwt. ($22/mt or $20/nt) in the near-term. However, any shortage will not likely affect capacity utilization. US mills have kept utilization rates at around 60-65 percent in order to keep prices from dropping, so there is not much incentive to raise rates--and therefore supply--when the current situation is resulting in higher prices.
Additionally, early speculation for April scrap pricing is pointing toward another sideways trend for shredded, which would give the US wire rod market room to further firm up spot prices; official asking prices are currently just over $2.00 cwt. ($44/mt or $40/nt) above spot prices, and if demand indeed increases due to short supply, there is a good chance domestic wire rod prices could hit the $40.00 cwt. ($882/mt or $800/nt) ex-Midwest mill mark by May.
