Although demand activity for domestic wire rod has been steadier than other long products, buyers have not fully accepted recent mill price increases.
A steady flow of demand from the automotive and appliance sectors has balanced out sluggish construction demand, putting wire rod in a better position than other long products. However, just like with rebar and merchant bar pricing, the recently announced increases for wire rod have not fully stuck. After different mills revealed different increases-leading to a wide span of offering prices-most transaction prices have narrowed into the range of $31.50-$32.50 cwt. ($683-$717/mt or $630-$650/nt) ex-mill in the last week, with only large orders getting the lower end of the price range.
Wire rod demand might be steady, but it is in no way spectacular, which has led many to believe that customers who are barely accepting the current price increases will certainly not accept another increase next month. Already, predictions for September shredded scrap prices are on the rise, with new ideas ranging from $30-$50/long ton (compared to $20-$40/lt reported last week). Wire rod buyers didn't necessarily boost inventories ahead of the price increases, but they do have relatively decent stock levels-not too much, not too little-so they might be able to engage in a stand-off with mills if it comes down to it.
Despite gradual improvements in end-use activity, current conditions in the domestic wire rod market are not amenable to imports. Turkish rod offers have not changed in the last week, even though demand is weakening abroad. Prices are still in the range of $29.50-$30.50 cwt. ($650-$672/mt or $590-$610/nt) duty paid, FOB loaded truck in US Gulf ports. Understandably, US buyers have little to no interest in these prices.
