NEW YORK The
wire rod market is unlikely to support a price increase, given
current fundamentals, mill and buyer sources told AMM
after Nucor Corp. announced a price hike Oct. 21.
Wire rod prices have
softened over the last several months, with mesh-quality wire
rod dropping to around $630 per ton (31.50 per hundredweight)
in October from around $650 per ton ($32.50 per cwt) in
Most mills so far have
settled their November prices sideways following scrap prices
that were nearly flat earlier this month, and wire rod demand
has not been particularly strong, rod buyers and mills said (
amm.com, Oct. 1).
As a result Nucor
Corp.s $20-per-ton increase on wire rod prices from its
Darlington, S.C., mill came as a surprise to the market, rod
buyers and mills said.
"This kind of comes
out of left field," one rod buyer said. "Ive been
watching scrap go up a little bit, the foreign stuff seems up a
little bit, but I think this might be hard to put through."
"The chance of this
sticking doesnt look great," said one mill source. "With
the current market reality, quite frankly I dont know how
it can hold."
Nucor risks being undercut by other market players, and the
success of the price increase will depend heavily on whether
other mills follow in the next few days.
"Im sure the
mills are not happy with market conditions, but I just
dont see Nucor taking the risk of raising prices and
trying to stick to it and letting someone else swoop in there
and steal their business," a second rod buyer said. "Anyone
with any buying power is not going to be paying 20 bucks more.
... Theres just not enough demand right now to make that
A third wire rod buyer said he had been offered material for
November at unchanged levels and saw no reason for any