As predicted, US domestic wire rod mills announced a price increase this week, however the increase amount far surpassed expectations. While most market players were expecting something in the range of $1.50-$2.50 cwt. ($33-$55/mt or $30-$50/nt), mills announced a $4.00 cwt. ($88/mt or $80/nt) price increase, effective with all new orders.
Sources tell SteelOrbis that mills will have no problem pushing through the full increase amount, but it won’t all happen at once. Already, spot prices for newly quoted orders are up $2.00 cwt. ($44/mt or $40/nt) from last week, bringing offers into the range of $47.00-$49.00 cwt. ($1,036-$1,080/mt or $940-$980/nt) ex-mill.
Sources say the rest of the increase is expected to absorb by the end of this month at the latest, adding that wire rod buyers have “zero leverage” to resist higher prices due to strong demand and continual tight supply. If any deals are offered, sources say they will be limited to the highest tonnage orders.