Wire rod buyers eye offshore material

NEW YORK — U.S. wire rod mills are digging in their heels on the most recent price increases, but as domestic prices gain traction, more buyers report that they’re looking to overseas suppliers to meet their needs.

In March, domestic steel mills announced wire rod price hikes for April 1 shipments, with Nucor Corp. and ArcelorMittal USA LLC leading the way at up $40 per ton ($2 per hundredweight) and other mills following at up $35 per ton ($1.75 per cwt).

A portion of the increases appear to have stuck, with sources this past week reporting mesh-quality low-carbon wire rod prices at $690 per ton ($34.50 per cwt) f.o.b. mill, industrial-quality low-carbon rod at $710 per ton ($35.50 per cwt), high-carbon wire rod at $735 per ton ($36.75 per cwt) and cold-heading quality material at $790 per ton ($39.50 per cwt). That marks an increase of $30 per ton ($1.50 per cwt) on all products, although some reported a little negotiating room.

On the spot market, "generally, we got about $30 out of it," a mill source said of the price increases.

"(Up) $2 (per cwt) has stuck from certain mills," said one rod buyer in the Midwest. "Others are at (up) $1.50. But I’m not in a hurry to buy, because I think those prices are going right back down again in May."

With published domestic prices on the rise, some wire fabricators said they have reduced their buying except to fill holes in their inventories, while others say they are still pushing for deals.

"The thing with some buyers is that they shrug their shoulders when the price goes up. I sure as hell don’t shrug my shoulders. Once (the mills) know that you’re not going to budge, they know (they’re) going to have to go down to make a sale," said a Southern rod buyer.

Others said they were turning to imports, saying margins were too slim to justify purchasing costlier domestic material.

"Domestics have said they were going to up $1.75 (per cwt). They can do what they want. We’re not going to buy from them. We don’t need to. ... They can do that as much as they want and if people don’t buy, they’ll have to reassess where they’re at," said a Midwest wire fabricator. "We’re talking to traders about purchasing for July or August timeframe arrival."

At the same time, rod buyers are watching for early signs that ferrous scrap prices might fall in April, keeping some would-be buyers on the sidelines.

"It seems like everyone’s waiting to place their orders, and there’s a feeling that scrap is going down," said a second mill source.

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