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Steel wire rod prices fall as scrap declines

Keywords: Tags  steel, wire rod, prices, scrap, Interwire, automotive, construction, Samuel Frizell

NEW YORK — Steel wire rod prices have retreated in April on the back of lower scrap prices, with many market sources having reported signs of weakness in the wire market at the beginning of the year.

Though some wire producers reported improved business in the first four months of 2013, most said sales were flat over the same period a year ago, and mill sources said they haven’t seen the effects of a gradually improving economy on their order books this year.

“People haven’t seen the pickup there would normally be this time of the year. The weather’s holding everything back. We’re waiting for spring,” one rod mill source told AMM. “We’re down everywhere about $1 (per hundredweight).”

Market sources confirmed that mills had dropped their prices for most transactions around $20 per ton ($1 per cwt) in the second half of April as scrap prices saw an unusual price softening early in the month (, April 10).

Sources reported that most mesh-quality low-carbon wire rod sales were conducted at $670 per ton ($33.50 per cwt) f.o.b. mill this past week, industrial-quality low-carbon rod at $680 per ton ($34 per cwt), high-carbon wire rod at $715 per ton ($35.75 per cwt) and cold-heading-quality material at $770 per ton ($38.50 per cwt).

Demand has been disappointing this year, sources said, with wire producers reporting business as either flat or down compared with 2012.

“We certainly haven’t been blowing the doors off,” a second rod mill source said. “Most of our customers have been saying it’s been a little slow right now and hoping it picks up later in the year.”

“They’re talking about a housing boom, but I don’t know where it is,” said a wire producer in the Midwest who sells construction products. “I think (sales are) down a little bit over last year. We just can’t quite seem to get over that hump.”

Wire producers have dropped prices as well, and sources said the margin spread was thin, even as demand remains mediocre.
“There’s been little restraint on the part of the wire guys, who could have held on and managed their spread, but they let it get away,” a wire producer said. “Everyone kind of ran out of work and started cutting prices.”

The mood among rod vendors and buyers at this past week’s Interwire conference in Atlanta was dampened by continued sluggishness and tepid demand, as unseasonably low scrap tags have dragged down rod prices (, April 25).
Some sources, however, said that business was booming.

A wire mesh producer in Texas said he was raising his prices to slow down sales as he waits for a shipment of Chinese rod, and a third rod mill source reported strong sales for agricultural end products, including fencing and feed troughs. One multiregional service center source said his company was having a strong year so far.

“March was our biggest month ever in shipments,” the service center source said. “(So) from a personal, company standpoint, when you come off the biggest month ever, April’s been a touch on the weak side. ... I don’t know if that’s a touch of hangover. I’m going to let May be the bellwether.”

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