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Wire rod buyers seek market clarity

Keywords: Tags  wire rod, American Wire Producers Association, market uncertainty, inventories, scrap, demand


NEW YORK — Domestic wire rod buyers will try to get a handle on an uncertain market at the American Wire Producers Association’s upcoming annual conference.

A drop in scrap prices earlier this month has left some buyers wondering whether mills will be forced to drop their prices, but an expected pickup in demand for the spring has left the outlook hazy.

"Right now, I think that crystal ball is not very long out there," a trader said. "Usually it’s three months, six months; now it’s pretty short."

The conference—Feb. 18-20 in Orlando, Fla.—is likely to shed some light on market movements, sources said, as well as help shape the market, with attendees discussing deals over the next few months.

"You get everyone coming together" at the conference, said an East Coast fabricator. "There’s lots of negotiation and lots of discussion. If you really get active, you can come away with an awfully good sense of where the market is."

AMM’s Midwest Ferrous Scrap Index for No. 1 busheling settled Feb. 11 at $375.24 per gross ton, down 3.5 percent from $388.97 last month, while AMM’s Midwest Ferrous Scrap Index for shredded scrap settled at $374.93 per ton, down from $386.49 in January (amm.com, Feb. 11).

Mills could resist lowering prices on some wire rod grades due to early indications that demand from the construction sector may pick up, sources said.

"We are getting forecasts from customers that say spring is near," a wire fabricator said.

A southern wire fabricator also said he is seeing demand beginning to pick up in the commercial construction sector. "We don’t see the specific projects, but just judging by the customers, (they’re) medium-sized projects," he said. "I wouldn’t say we’ve seen a huge move, but for this time of year, we’re a little better than we’d normally be."

Without a good handle on the market, rod buyers have kept their inventories lean, seeing no need to stock up with lead times at the mills as short as two or three weeks.

"As long as lead times are short and buyers believe they can pick up the phone and get anything they want in 15 to 20 days, they don’t feel compelled to get inventory," said the East Coast rod distributor.

Expected growth in automotive demand could also continue to sustain some rod grades.


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