Domestic wire rod prices have slipped slightly over the past
two weeks as scrap prices weakened and demand remains soft.
price for mesh-quality low-carbon wire rod has eased to $640
per ton ($32 per hundredweight) f.o.b. mill from $650 per ton
($32.50 per cwt) in early June, while industrial-quality
low-carbon rod is now at $650 per ton ($32.50 per cwt), down
from $660 per ton ($33 per cwt). High-carbon wire rod is $700
per ton ($35 per cwt), down from $710 per ton ($35.50 per cwt)
earlier this month, and cold-heading-quality material is $740
per ton ($37 per cwt), down from $750 per ton ($37.50 per
The lower steel prices
come on the heels of an approximately $6-per-ton decrease in
Midwest Ferrous Scrap Index for shredded scrap earlier this
amm.com, June 10).
"When you follow
scrap, its universally down," one rod buyer said.
"Its been a deflationary trend. Of course, thats
going to erode margins at the mills."
Rod buyers in most
sectors, including construction and industrial products,
reported tepid demand in the past few weeks, with the one
bright spot being automotive. Rod buyers producing for auto
end-users, as well as rod mills with cold-heading quality
capabilities, have seen strong sales compared with the rest of
the market, sources said.
The auto industry has
seen a strong recovery since the recession, with U.S. light
vehicle sales expected to reach 15.4 million units in 2013, up
about 6 percent from 14.5 million vehicles last year, Oxford,
England-based auto industry forecasting service LMC Automotive
Ltd. said. In 2012, auto sales rose 14 percent year on
"The real answer is
transportation. Thats the main thing on the horizon that
can turn things around," a one rod mill source said. "But I
dont know how long even automotive can hang in there
because theres some data that that might be cooling a
bit, and thats the biggest thing keeping us going."
Meanwhile, some rod
buyers have planned shutdowns for a week in July, sources
"A couple of my guys
are taking a week down in July," the mill source said.
"Theyre taking vacation maintenance. Obviously, if you
were super busy you wouldnt be doing this."