NEW YORK Wire
rod buyers are poised to accept higher prices from domestic
mills despite endemically weak demand and flush import volumes,
rod buyers and mills said, as rising scrap tags prompt an
uptick in steel prices.
Gerdau Long Steel
North America, Tampa, Fla., announced a $30-per-ton
($1.50-per-hundredweight) increase on wire rod Nov. 1 following
a $20-per-ton ($1-per-cwt) increase from Nucor Corp. in October
amm.com, Nov. 1), but those increases werent
reflected in transactions.
However, when the
announcements were made, customers said, mill representatives
had assured them that there would be no immediate increases on
But pricing sentiment
has turned in the past few weeks, with rod buyers now expecting
an increase and mill sources preparing to reinforce higher rod
prices if scrap settles higher.
up. The increases will be a little of this and a little of
that. They can get it done by the end of the year. If they can
get $20 to $30 per ton between now and the end of the first
quarter theyll be happy," one rod buyer said.
"When I book for
December, well be up $30 (per ton)," according to a
second rod buyer, who is accepting an increase.
Keystone Steel &
Wire Co., Peoria, Ill., introduced a $30-per-ton
($1.50-per-cwt) increase on wire rod Nov. 7
(amm.com, Nov. 8), just as AMMs
assessment of shredded automotive scrap prices in Chicago
settled $31 per ton higher (
amm.com, Nov. 7).
Mills and rod buyers
havent yet negotiated an increase, but deals are expected
to be made this coming week at higher prices.
One mill source said
mills would push for increases greater than scrap if they
could, as they try to make up for thin margins. But other mill
sources said their customers might not accept price increases
above the gains in scrap due to weak demand.
"All the mills have
been beaten up because of foreign imports, so wed like to
see prices come up (more than scrap). But I dont see the
demand for it," a second mill source said.
Demand for domestic
wire rod has been poor in most regions, mill sources and rod
buyers said, and with few purchases of high enough volumes to
justify discounting, mills have mostly stopped cutting
A third mill source
said his facility is buying less scrap because of low finished
wire rod demand, but added that he likely would still push
through an increase.
"Business is slow, so
I cant justify the increases. Were doing a very
minimum scrap buy, but thats just me. I just dont
see how theyre coming up with all the scrap increases. I
dont know if the demand is out there," he said.
If a trade case is
filed against China in 2014 (
amm.com, Oct. 22) and the price increase fails to
take hold, mills will point to the failure of a price increase
in the face of overwhelming import volumes, two buyers
"My best guess is,
(the price hikes) are kind of part of the trade suit process to
demonstrate to the (International Trade Commission) that they
tried, because as soon as they raised prices they said it
doesnt really mattertheyll do what scrap does
in November," a third rod buyer said.
For now, mesh-quality
wire rod remains around $630 per ton ($31.50 per
hundredweight), industrial-quality rod at about $640 per ton
($32 per cwt), high-carbon rod at $680 per ton ($34 per cwt)
and cold-heading-quality rod at about $770 per ton ($38.50 per