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Wire rod market split on price hikes holding

Keywords: Tags  rebar prices, wire rod prices, Nucor, Gerdau Long Steel North America, ArcelorMittal USA, imports, trade cases, anti-dumping duties Nat Rudarakanchana

NEW YORK — Wire rod price increases by major domestic mills could stick for August and beyond, although market participants are uncertain about whether the market will bear the higher tags indefinitely.

Charlotte, N.C.-based Nucor Corp. this past week said it was increasing prices for all wire rod products by $15 per ton for August shipments (, July 17), a move followed a day later by Chicago-based ArcelorMittal USA Inc.

Tampa, Fla.-based Gerdau Long Steel North America is likely to raise wire rod prices by $10 per ton, a wire rod buyer said, although he had not seen an official letter. He was waiting to hear from Sterling, Ill.-based Sterling Steel Co. LLC, another U.S. wire rod producer, after Peoria, Ill.-based Keystone Steel & Wire. Co. raised prices by $10 per ton on July 18.

The wire rod buyer said his July prices have stayed flat relative to the past four weeks. "I just feel the market is not strong enough to foot any increase," he said, citing unexceptional demand and lower prices for related products like wire in the Midwest.

He said he is likely to switch to imported material, probably from Turkey or Egypt, if domestic mills continue with a series of price hikes in coming weeks.

But another wire rod distributor contended that declining import wire rod inventories and improving business indicators leave room for higher tags. "Prices aren’t going down," he said. "Mills are holding firm on prices. There are no deals to be made out there." As for whether the most recent hike for August shipments will stick for long, he said, "Right now, I just don’t know."

AMM’s price assessment for domestic wire rod has stayed flat for the past two weeks, and import prices were steady at $630 to $645 per ton for low-carbon rod into Houston.

But domestic rebar prices slipped to $33.50 per hundredweight from $34 as Turkish and Mexican import rebar inventories undermined domestic prices despite better construction demand.

An anticipated rebar price hike in the past two weeks failed to materialize, one rebar distributor said, partly because domestic mills are scared of unsettling rebar buyers, even with unseasonally strong demand. "(U.S. mills) don’t want to put any brakes on how busy and fast the rollings are getting filled," the distributor said. "They’re trying not to scare it off with any increase."

Mills are not likely to lift rebar prices until the U.S. International Trade Commission makes a determination in a trade case against Mexican and Turkish rebar in September or October, he said, and fickle scrap price movements, which fell in June but rose in July, also will add to the uncertainty.

Import rebar edged lower to $585 to $605 per ton from $590 to $610 as Turkish producers offered lower prices ahead of final trade decisions in coming months. Many Turkish mills are said to be selling aggressively ahead of the determination.

A sizeable shipment of Portuguese rebar is due to arrive in Houston in August at a price of $595 per ton, a rebar trader said.

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