German Steel Wire Rod Prices gets Support of Increased Freight Charges from Asia

Steel Wire Rod prices in the USA saw a slight decrease of 0.2% on May 3rd, influenced by reduced demand. FRED data indicates a 0.4% decline in the Producer Price Index for Carbon Steel Wire Drawing in March compared to the previous month. The American Iron and Steel Institute (AISI) noted an increase in US crude steel production for the week ending May 4th, driven by international uncertainties, which led to increased imports and subsequent lower domestic Steel Wire Rod prices. In March, the Producer Price Index for Metals and Metal Products, specifically Steel Wire, dropped by 1.3% month-on-month. This market competitiveness has made potential buyers cautious, hesitant to enter new contracts. The automotive sector remains particularly cautious due to high inventory levels, as evidenced by an 8.7% decline in sales volume from March to April. This environment reflects hesitancy, subdued activity, and cautious consumer behavior.

In Germany, Steel Wire Rod prices surged by 0.6% week on week due to a 7.4% increase in freight charges from China/East Asia to Northern Europe on May 3rd. Low inventories during the European Labour Day holidays also influenced prices. Producers expect restrained consumption but anticipate higher prices improving margins along the supply chain. Consequently, prices for new contracts are rising based on volume. Increased imports and restocking efforts have encouraged German Steel Wire Rod manufacturers to raise prices. The Steel Wire Rod market is thriving, with demand growth. March saw a 0.2% rise in producer prices across key sectors, enabling local suppliers to raise prices amid reduced import competition and higher buyer demand. Construction price indices climbed by 1.35% in Q1 2024, while April witnessed a substantial 19.8% increase in automobile sales, indicating robust market activity. European producers are expected to adopt higher pricing strategies and increase imports, signaling a positive outlook with bullish sentiments prevailing.

In China, Steel Wire Rod prices rose by 0.2% compared to the previous week on May 3rd. The National Bureau of Statistics reported a 0.4% monthly drop in supplier delivery times in April. Freight costs for shipping from Northern Europe to China/East Asia increased by 2.4% week on week. China saw scrap Steel Wire Rod prices rise due to increased demand from sustained interest and rising prices of iron ore and coking coal. Limited inventory availability after the Chinese Labour holiday impacted local Steel Wire Rod pricing. Disruptions in container shipping traffic in the Red Sea worsened, leading to longer voyages and higher freight rates. In April, the Producer Prices Index rose by 3.6% month-on-month per NBS data, driven by China's industrial restructuring. Increased demand was seen in the automotive, home appliances, shipbuilding, machinery, wind power, and nuclear power sectors. China aims to boost market demand for Steel Wire Rod equipment in manufacturing through strategic planning. Automobile sales surged by 70% from February to March.

According to ChemAnalyst, changes in pricing trends in the United States may occur due to increased demand in sectors like automotive, spurred by seasonal changes. In Germany, Steel Wire Rod costs may rise due to higher raw material prices. Conversely, China might experience a demand surge from the construction industry, driving up purchases and prices. These regional market dynamics highlight the complex factors affecting pricing in the global Steel Wire Rod market.