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 August.
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."
Charlotte, N.C.-based 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 work."
A third wire rod buyer said he had been offered material for November at unchanged levels and saw no reason for any increase.