NEW YORK Wire rod prices have risen at least $10 per ton for most grades for August shipment following an increase in July scrap prices, with rod mills passing much of their higher input costs on to their customers.
Rod buyers whose prices are fixed to a scrap cost index swallowed the full increase in scrap prices. Chicago buying prices for shredded automotive scrap, the raw material input used for lower-carbon grades of wire rod, rose $16 per ton in July (amm.com, July 3).
"Whatever that scrap number was, my prices have fluctuated directly with Chicago shredded scrap," a wire rod buyer in the South said.
Rod buyers whose prices are tied to a three- or five-city scrap price average saw a similar increase, sources said, although some lower-carbon buyers said they were paying only part of the increase.
Most rod buyers reported a slowdown in business in July, with heavy rain on the East Coast slowing construction projects and tepid downstream demand slowing business on the industrial side.
"The rain has killed us," the wire rod buyer in the South said. "If you look at a precipitation map month by month east of the Mississippi, there has been heavy precipitation from the beginning of the year all the way through today. Its like a rainforest down here. ... And you dont work when its wet in construction."
"Were keeping our head above water," a Midwest rod buyer said. "Were not setting any records here. July was a little off from June."
The market is maintaining a "status quo" during the sluggish summer months, a mill source said. "If you fell asleep a month ago and then woke up, nothing would be different."
Wire mesh-quality rod is around $650 per ton ($32.50 per hundredweight) f.o.b. mill, industrial-quality wire rod is $660 per ton ($33 per cwt), high-carbon wire rod is around $715 per ton ($35.75 per cwt) and cold-heading quality is $755 per ton ($37.75 per cwt).