Domestic steel wire rod mills have already announced to many of
their customers that they are raising rod prices for August
shipments, but rod buyers are skeptical the increases will
stick as many this past week said they successfully squeezed
out prices from suppliers at lower July shipment quotes.
"People saw the
increase and they were able to jump onto July (rolling)
schedules," a wire rod buyer on the East Coast said.
"Everyones taking advantage of short lead times."
wire rod prices remained unchanged this past week, with
mesh-quality rod transacting at around $640 per ton ($32 per
hundredweight) f.o.b. mill, industrial-quality wire rod selling
at $650 per ton ($32.50 per cwt), high-carbon wire rod trading
around $700 per ton ($35 per cwt) and cold-heading quality
selling at $740 per ton ($37 per cwt).
These prices remain at
a several-month low, as low scrap input costs at the mills and
mediocre demand have recently kept wire rod tags under
pressure. Rainy weather conditions in different regions of the
country have slowed construction spending and prevented
concrete reinforcing mesh and prestressed concrete (PC) strand
sales from sparking high rod demand, sources said, while
general economic malaise and import pressure has hampered wire
sales for other applications.
"Its not a
normal summer market. Its a little softer than wed
normally expect. Most of our energy in terms of volumes and
pace of business takes place in the spring and summer, but
business from our perspective has been soft," said an
industrial-quality and high-carbon rod buyer in the
A mesh-quality and
high-carbon wire rod buyer in the South agreed that the summer
has been unusually quiet thus far.
seen a deceleration in business. This should seasonally be the
peak and its really not impressive at all," he said. "I
think business is overall really weak."
With the overall
market soft, rod buyers were nearly unanimous in saying they
dont believe the mills pricing increases for August
shipments will fully stick once the round of August purchasing
begins. With demand so tepid, the mills are unlikely to hold
out on pricing and recover the increase in scrap prices, buyer
"As a supporter of the
domestic wire rod industry, Im all in favor of them
trying to cover their cost increases, but I think the market is
soft and it might be difficult," the Midwest buyer said.
strength for it. It wont fly," a second rod buyer in the
Midwest said of the August increases.
Rod buyers said they
expected prices to come down in the next few months.
"I promise you (big players) wont pay what the product
of that shredded index would have indicated," the East Coast
wire rod buyer said. "I think its going to be kind of a
one-month spike (in prices). Everyone feels its going to
go down over the next couple of months."