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Steel wire rod price hikes mostly stick

Keywords: Tags  wire rod, Gerdau Long Steel North America, Nucor, ArcelorMittal USA, steel demand, construction, steel imports, Samuel Frizell

NEW YORK — The steel wire rod market is humming along at a slow but constant pace, with rod mills holding on to most of their April price increases as demand in construction picks up for the spring, sources told AMM.

"It’s still sluggish, but there seems to be an underlying positive message in all this," one mill source said.

Domestic steel mills are holding on to most of their $35- to $40-per-ton ($1.75- to $2-per-hundredweight) wire rod price hikes announced for April 1 shipments (, March 29), sources said, with prices up between $25 and $40 per ton from pre-increase levels depending on tonnage and vendor.

Sources reported most mesh-quality low-carbon wire rod sales at $690 per ton ($34.50 per cwt) f.o.b. mill this past week, industrial-quality low-carbon rod at $700 per ton ($35 per cwt), high-carbon wire rod at $735 per ton ($36.75 per cwt) and cold-heading quality material at $790 per ton ($39.50 per cwt), with certain pricing leaders securing more of the increase and others offering more negotiation room.

"As much as $2 (per cwt) has stuck (but) it seems to me they’re getting half back when we’re negotiating prices to back down," a large rod buyer in the Midwest said.

Generally "$25 to $30 (per ton ) is sticking up," the mill source said of the announced April 1 price increases, while others reported a full $40-per-ton increase at some mills.

Some rod buyers, particularly those serving the construction market, said they were starting to buy more material from domestic mills, while others said they couldn’t afford the price increase and were increasingly looking to import material.

Construction demand is beginning to pick up after a long winter across several key regions delayed the beginning of the construction season, sources said. Wire drawers selling into housing and larger construction projects said they are seeing business slowly improve, although those serving industrial applications said they are still facing headwinds.

"We’re getting a pretty strong order backlog that’s been better than we expected," according to one wire drawer for construction applications, noting that he was buying extra material for May to meet orders.

"We’ve seen demand only in construction products pick up," a wire drawer in the South confirmed.

But for industrial applications, demand is tepid and buyers are turning to cheaper imports to battle thinning margins.

"(Sales of) low-carbon industrial wire have been flat," the buyer in the South said.

Several buyers reported delivered mesh-quality import prices as cheap as $580 per ton ($29 per cwt) and said they were relying increasingly on imports in order to stay profitable.

"The market is soft in terms of customer demand and it’s hand-to-mouth (purchasing). Nobody’s bring in inventory unless they need it. It’s very cutthroat," a rod buyer in the Midwest said. "We didn’t buy any domestic steel for April because we didn’t need to and we couldn’t afford it."

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