US
wire rod prices have remained flat since last week; however, there is a good chance that US producers will raise their prices in the coming weeks based on higher
scrap prices.
Already, there are indications that mills are trying to stop the bleeding, so to speak, and firm up their numbers. While most low carbon rod offers from US mills remain at approximately $24.00 cwt. to $25.00 cwt. ($529 /mt to $551 /mt or $480 /nt to $500 /nt) ex-mill, in efforts to set a floor price, there has, in the last week, been an increasing reluctance to offer special discounts, which have been dragging down the market price over the last few months. Now, with US shredded
scrap prices expected to rise by about $40 /long ton in May, mills may have just the excuse they need to formally raise prices once and for all. Nevertheless, if demand remains as low as it has been, producers may have a tough time enforcing any kind of price hike.
Downstream businesses that consume
wire rod still report sluggish sales, and despite some glimmers of hope that the economy may be close to bottoming out, there is likely still further fallout to come in the
automotive and housing sectors, both of which are big consumers of
wire products. At present, most US
wire drawers are operating at a maximum of 40 percent. Still, one thing working in domestic rod mills' favor is the lack of imports coming into the country.
Traders say that there are next to no new rod imports in the pipeline, and the bargain-priced South American material offers seen in recent weeks have since disappeared.
Turkey is still offering mesh-quality
wire rod to the US at about $23.50 cwt. to $24.50 cwt. ($518 /mt to $540 /mt or $470 /nt to $490 /nt) duty-paid, FOB loaded truck in US Gulf ports, but these offers are not competitive enough to spark any interest.
For now, despite rumors that US rod mills plan to try to push through a price hike following the May increase in US
scrap prices, based on the current slow demand, the pricing trend for both domestic and import rod offers in the US remains neutral. However, given the current supply constraints of severely reduced domestic
production and an import pipeline that has all but dried up, US
wire rod pricing is likely very close to the bottom, if it is not there already.