Wire rod pricing in the US has been static for nearly a month, reflecting a neutral trend; but as long the buyers sit on the fence and the highly anticipated spring demand doesn’t pan out, prices may start to retreat.
Already, import wire rod offers from Turkey fell slightly from last week, by $0.75 cwt. ($17/mt or $15/nt), due to softening scrap prices in Turkey and continued weak sales. Most Turkish rod is now offered in the range of $27.75 cwt. to $28.75 cwt. ($612/mt to $634/mt or $555/nt to $575/nt) duty-paid, FOB loaded truck in US Gulf ports. There have been a few offers from Spain, but the pricing is mostly in line with Turkey. However, despite the temporary decline, there has been speculation that scrap pricing will go up in Europe and in the US soon, which would likely stabilize offers from Europe.
On the domestic front, wire rod pricing has not changed from last week, with most domestic low carbon offers still ranging between $30.00 cwt. and $31.00 cwt. ($661/mt to $683/mt or $600/nt to $620/nt) ex-mill. Demand is still very soft, but because mills are running on limited capacity and wire drawers also have low inventories right now, even a small increase in demand will likely affect pricing.
There has been gradual improvement in the domestic wire rod market, including of increasing automotive activity in the US. As shown in the chart below, new orders for motor vehicles and parts are finally showing marked improvement after two plus years of steady decline. However, both residential and non-residential construction activity has been overly quiet, which offsets all the positive gains from the automotive industry. Therefore, before the construction markets turn around, a positive pricing trend is not expected for the US wire rod market.
