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Steel wire rod buyers eye more cuts

Keywords: Tags  wire rod, wire rod mills, wire rod prices, Chinese wire rod, wire rod buyers, steel, Samuel Frizell

NEW YORK — Wire rod mills’ offer prices have dropped about $10 per ton from September, mills and rod buyers said, drawing some takers as other buyers—particularly those that have booked imports—hold off in anticipation of further price drops in October.

The price decline follows a $9-per-ton decrease in AMM’s Chicago shredded automotive scrap price earlier this month (, Sept. 6).

Rod prices have generally been softening since spring, aside from a price increase in August.

"Scrap’s down 10 bucks. As we look toward October, the rod mills have the last couple of times gone down with scrap. We’ll continue to see downward pressures on scrap and rod," according to one wire rod buyer, who is transacting $10-per-ton lower than earlier this month.

"Everyone’s following scrap, and that puts us at a disadvantage now with prices dropping," one mill source said.

Wire mesh-quality rod is transacting at around $630 per ton ($31.50 per hundredweight) f.o.b. mill, off from $640 per ton ($32 per cwt) earlier in September. Industrial-quality rod is $640 per ton, down from $650 per ton ($32.50 per cwt), and high-carbon rod is at $680 per ton ($34 per cwt), off from $700 per ton ($35 per cwt). Cold-heading-quality wire rod is steady at $770 per ton ($38.50 per cwt).

Imports of wire rod from China and soft domestic demand are also putting downward pressure on prices. Many rod buyers have booked orders of Chinese material through year-end and won’t order large volumes from domestic mills, a trend that will likely be exacerbated in the fourth quarter, when buyers expect large quantities of imports (, Sept. 6).

More than 85,000 tonnes of Chinese hot-rolled bar—much of which is actually wire rod with trace amounts of boron that has been misclassified (, Aug. 19)—is likely to land in U.S. ports in September, according to preliminary license data through Sept. 25 from the Commerce Department’s Import Administration.

Market players expect scrap prices to continue a steady slide. With finished wire prices falling and competition high, several buyers told AMM that they are holding off on purchasing until they see more favorable prices.

"Business is really slow moving. I don’t know if it’s uncertainty in the economy, it’s just not moving out the door," a second mill source said. "Now we’ve got the mindset that we’ve got to move it out the door. There’s talk of scrap going down, and buyers want to see if they can hold to next month to get the best price."

The first mill source said that many of his customers had booked large quantities of Chinese material for the fourth quarter. "A lot of imports are coming in the fourth quarter. The first quarter is being booked for Chinese material, too," he said. "It’s keeping prices depressed not only for low carbon; but also I think the customer base here, they’re all taking part in buying imports for fear that they won’t be competitive otherwise."

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