Although the recent spate of price increase announcements from US domestic wire rod mills has been met with bemusement at best, sources tell SteelOrbis that mills plan to step up their resolve and demand customers pay at least a minimal portion of their newest increase. Considering that shredded scrap prices have increased about $50/lt in the last two months, mills are determined to not sell "at a loss" anymore, and their aggression is already starting to show. Since the announcement last week, spot prices have moved up $0.50 cwt. ($10/nt or $11/mt), which leaves $0.50 cwt. remaining of the December 1 increase. While sources don't expect mills will get all of that increase, plus the full January 1 boost--$1.25 cwt. ($25/nt or $28/mt) or $1.50 cwt. ($30nt or $33/mt), depending on the mill--most believe that by the time January scrap prices settle, spot prices will be up another $0.50-$1.00 cwt. Until then, domestic prices are now in the range of $33.00-$34.00 cwt. ($660-$680/nt or $728-$750/mt) ex-mill, with larger customers reportedly able to book slightly below the lower end of the range.
What will happen to prices after that remains to be seen. Some sources predict that once Chinese import orders placed now start arriving in early spring, US mills will have to back off and rescind some of the winter increases. Demand for Chinese wire rod remains decent, and with rumors of prices softening in the near-term (Chinese mills are reportedly aware of antidumping threats but are eager to sell nonetheless), import activity could pick up through the New Year. For now, however, Chinese wire rod offers are stable in the range of $28.50-$29.50 cwt. ($570-$590/nt or $628-$650/mt) DDP loaded truck in US Gulf ports.