Earlier this week, Nucor announced a price increase for wire rod that was almost half of the increase announced by Keystone just over a week ago. Even though Nucor’s $1.25 cwt. ($25/nt or $28/mt) price hike is, according to sources, much more “reasonable” than Keystone’s $2.25 cwt. ($45/nt or $50/mt) increase—both effective with shipments as of June 1—many believe it is “unlikely” the increase will absorb into the market, especially considering US wire rod mills’ failure to obtain all of March’s combined $5.00 cwt. ($100/nt or $110/mt) in price increases.
The main factor behind the skepticism is the resistance to higher prices that downstream wire producers are facing from their own customers. Sources tell SteelOrbis that when customers consider the current mild downtrend in US domestic scrap prices, plus steady demand that has not seen a significant spike, they view wire rod prices increases as based on greed and not natural market dynamics. “It’s no coincidence that this is happening after Section 232 priced most imports out of the market,” one source said. “Mills are raising prices just because they can, which is great for them but not so much for businesses downstream.”
Still, mills have been able to “move the needle” slightly regarding US domestic wire rod spot prices, which have increased by $0.50 cwt. ($10/nt or $11/mt) this week following Nucor’s announcement. As for the rest of the increase—and the rest of March’s increase—sources remain wary that wire rod prices will move much beyond the new current spot range of $38.50-$40.00 cwt. ($770-$800/nt or $849-$882/mt) ex-mill.