Just like other steel markets, the Italian wire rod segment has also recorded strong price increases in the past few weeks, amid tight supply, good demand and higher scrap prices. Local producers, who in early May were satisfied with prices around €690/mt delivered for drawing quality wire rod, are now aiming for the €800/mt level. According to the manager of a local wire drawing company, however, this move by producers remains only "an attempt" at the moment, since sales have so far been closed at lower prices, i.e., "between €730/mt and €760/mt for May deliveries".
The same source believes that there is little room for further increases: "At some point, there is a lack of liquidity, a lack of credit lines, and the risk is that the system collapses. We are not buying at the price of €800." The source believes that "producers will try to raise their prices during June and that some buyers, having run out of feedstock, will decide to purchase large volumes, and so the price increase will be absorbed." However, "if all the big buyers decide not to buy significantly in June, then I expect prices to go back and stabilize between €700/mt and €750/mt for July. The next 10-15 days should be decisive," the source commented.