US wire rod pricing loses momentum in bad weather

As the bad weather conditions prevail in most of the US, the pricing trend for US wire rod reverted to neutral from slightly up in the last week. Wire drawers report weaker demand and thus increasingly reluctant to pay more for wire rods.

Domestic wire rod transaction prices also remained the same as previously reported, with most domestic low carbon offers falling in the middle of the $30.00 cwt. to $31.00 cwt. range ($661/mt to $683/mt or $600/nt to $620/nt) ex-mill. Many mills have their orders booked through April, but not all have passed along the February price increase of $60/nt ($3.00 cwt. or $66/mt) in its entirety.

The common concern throughout the domestic steel industry continues to be the negative effect of harsh winter weather. As of Saturday, Feb. 13, snow was on the ground in 49 of the 50 US states (Hawaii being the exception), temporarily halting construction projects and slowing construction materials, including steel shipments.

As far as the wire rod’s raw materials are concerned, there isn’t a big movement expected for scrap in to the next month so far and it should have a negligible role in wire rod price trend in the next few weeks.

As for import supply, most traders continue to offer Turkish rod in the range of $28.50 cwt. to $29.50 cwt. ($628/mt to $650/mt or $570/nt to $590/nt) duty-paid, FOB loaded truck in US Gulf ports with very little success. Recently, some Turkish mills were eager to offer deals in order to fill out ships, but they too watch the scrap prices very carefully since their margins have been squeezed by increasing raw material cost and sluggish sales prices. Going forward, import demand too remains low and chances passing another price increase to American consumers under the current market conditions continues to be low. Therefore the import wire rod pricing trend is neutral.