Import wire rod offers to the US have stabilized after a sudden drop last week, while domestic prices look to the upcoming scrap announcement for direction.
The US wire rod market has been quiet this past week, with both mills and their customers waiting for the imminent scrap price announcement. Although many predict a decrease in scrap pricing, by as much as $50/lt, there is no real way of knowing what's going to happen until it happens. Last month, everyone who thought scrap would continue to rise were caught by surprise at the sideways pricing move. If scrap does indeed come down, as many strongly feel, there is a good indication that mills might drop wire rod prices as well. However, there is talk of keeping transaction prices stable, in order for mills to widen their profit margin until scrap comes back up. By early next week, the outlook should become clear.
Until then, domestic prices are holding in the range of $32.00 cwt. to $33.00 cwt. ($705/mt to $728/mt or $640/nt to $660/nt) ex-Midwest mill. Even though wire rod customers are buying cautiously for now, demand is still steadily growing, so mills aren't making many deals. The automotive industry's improvement is still on track, with new orders for motor vehicle manufacturing and retail sales on a strong upward swing. Smaller sectors have also continued to show gradual growth, such as agricultural equipment and household appliances.
End-use activity hasn't been as strong overseas; tepid demand for wire rod in Turkey combined with unsustainable cost-based price increases led to a slight price correction last week. Wire rod prices dipped along with scrap, but a recent flurry of scrap buying prevented prices from decreasing any further. Currently, Turkish wire rod is still offered in the range of $32.00 cwt. to $33.00 cwt. ($705/mt to $728/mt or $640/nt to $660/nt) duty paid, FOB loaded truck in US Gulf ports.
Chinese wire rod has also remained stable, with offers also in the range of $32.00 cwt. to $33.00 cwt. ($705/mt to $728/mt or $640/nt to $660/nt) duty paid, FOB loaded truck in US Gulf ports.
