As March scrap predictions begin pointing sideways to slightly downward, US wire rod mills are finding increasing difficulty in firming up February prices.
The fact that scrap predictions can "turn on a dime" was mentioned in last week's report, and appropriately, new expectations this week peg March pricing at a sideways to slightly downward trend-quite a change from last week's rumblings of a slight increase in pricing. For the most part, US wire rod mills were counting on an increase next month to help them firm up spot prices closer to their official February asking prices of $39.25-$40.25 cwt. ($865-$887/mt or $785-$805/nt) ex-Midwest mill. While spot prices haven't necessarily softened recently, they are treading water in the $36.50-$37.50 cwt. ($805-$827/mt or $730-$750/nt) ex-Midwest mill range, with strong indications that it is becoming harder and harder for domestic mills to be aggressive with pricing.
On the West Coast, spot prices in the wire rod market are closer to $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) ex-mill. However, recent news regarding trade legislation against Mexican wire rod could have ramifications on the West Coast market. ArcelorMittal USA, Gerdau Ameristeel and Evraz Rocky Mountain Steel filed a scope/anticircumvention petition last week that claims Mexican mills Deacero and Ternium have been exporting 4.75 mm-diameter wire to the US, which is allegedly close enough to existing anti-dumping (AD) orders against 5.00 mm-diameter wire to be considered a circumvention of the order. Typically, wire rod from Deacero is available in the US West Coast for approximately $1.00 cwt. ($22/mt or $20/nt) below US domestic prices, but if the US Department of Commerce sides with the petitioning US mills, the result could cause an upward shift in West Coast wire rod prices.
Elsewhere in imports, Turkish wire rod offers have not moved in the last week. The current price range of $35.50-$36.50 cwt. ($783-$805/mt or $710-$730/nt) duty paid FOB loaded truck in US Gulf ports has still been met with mostly shrugs in the US market-until Turkish mills are willing to drop prices to more competitive levels, US buyers will most likely stick with domestic purchases.