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Wire rod market sits tight, awaits price cues

Keywords: Tags  steel wire rod, rod prices, Nucor, scrap surcharge, lead times, wire rod inventories, Samuel Frizell

NEW YORK — The steel wire rod market is on an even keel, with market players hesitant to make any big price moves even after one steelmaker reduced its scrap surcharge last week.

Consumers are holding their breath until the spring as transaction prices show little movement even after Charlotte, N.C.-based Nucor Corp. cut its scrap surcharge on wire rod by $10 per ton (, Feb. 19), and market players say buyers have been left some negotiating room with their suppliers.

"We didn’t (see a price drop) with all of our suppliers. Some move a little more mechanically, and for some it’s more of a negotiated fashion," a source at a fabricator in the South said.

A Midwest fabricator source said he had seen tags rise slightly, with the market banking that scrap will settle up in March. "The mills are bumping prices a little here and there where they can," he said. "(But) really nothing has changed."

"Prices have been fairly stable. ... So that’s a reason not be jumping the gun and trying to gauge the market," said a source at a Southeast wire fabricator that is keeping a lightly stocked inventory.

Domestic market prices remained unchanged Feb. 28, with mesh-quality low-carbon wire rod holding at $33.50 per hundredweight ($670 per ton) f.o.b. mill, industrial-quality low-carbon rod at $34 per cwt ($680 per ton), high-carbon wire rod at $35.25 per cwt ($705 per ton) and cold-heading quality product at $38 per cwt ($760 per ton).

Rod buyers have kept their stocks slim through the winter, wary of potential price moves.

"It’s pretty quiet. People are still trying to figure out what’s happening," one mill source said.

Buyers also have little incentive to stock up on rod, with lead times from domestic mills shorter than a month for most customers and as short as two to three weeks for others.

"We’re being disciplined here because the mills are still at a month turnaround," a second Midwest wire fabricator source said.

Market rumblings, including increased Chinese rod import prices and long-term optimism in the construction sector, have yet to have a discernible effect on the market.

Import prices for Chinese rod inched up slightly around the Chinese New Year holiday, which could give more leeway to domestic producers to control prices, market sources have said. Imports from China have been conspicuously low on wider rod sizes, a gap that wire fabricators have turned to domestic sources to fill.

"The domestics are going to be playing their own ball game. They’re going to be in the driver’s seat for about a month and a half," a second southern fabricator source said.

A trader was less confident. "(Imports) were an emerging picture. It’s not fully solidified," he said. "It’s hard for us to find rhyme or reason with this."

Market players expect a quiet market in the next few weeks, with short lead times continuing.

"(Lean inventories) is the trend with a lot of customers these days, but hopefully they’ll get a little more confident and things will get busier," a second mill source said. "The first quarter has been relatively slow. We’re just waiting to see if things are going to pick up during the second half."

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