For months US wire rod mills have been announcing price increases that have not entirely matched up with demand, and the trend continued late last week with a $23-$25/nt ($1.15-$1.25 cwt. or $25-$28/mt) price bump. Sources tell SteelOrbis that even if the latest increase makes its way into the market, it would take at least a month, if not more considering the previous $1.25-$1.50 cwt. ($25-$30/nt or $28-$33/mt) increase is just starting to trickle in. Of course, mills reportedly only announced an increase last week to keep market sentiment afloat--if they can keep announcing increases each month and collecting at least part of them, then weak demand will remain less of a factor. However, with mills ostensibly basing their price increases off the monthly scrap trend, it’s only a matter of time before this strategy falls apart--scrap prices won’t keep increasing forever. For now, US domestic wire rod spot prices are still in the range of $33.50-$34.50 cwt. ($670-$690/nt or $739-$761/mt) ex-mill--unchanged since last week--but a slight uptick is predicted for next week.
As for imports, Chinese wire rod prices dipped slightly in the past week ahead of the Lunar New Year holiday, as Chinese mills aim to book more orders beforehand. Wire rod import offers from China are now in the range of $28.00-$29.00 cwt. ($560-$580/nt or $617-$639/mt) DDP loaded truck in US Gulf ports, reflecting a $0.50 cwt. ($10/nt or $11/mt) decrease. However, the softening prices will likely only last during the pre-holiday period. Traders tell SteelOrbis that after the holiday, Chinese mills will re-evaluate the market to see if offer prices should be adjusted.