Steel Wire Rod Prices Rushing to a Higher Level in the US Market

In the US market, the Steel Wire Rod prices remained firm in the week ending March 17 following a price hike imposed by several domestic manufacturers last week. According to the market players, the domestic Steel Wire Rod cost is up by USD 11/MT this week as the market begins to digest the mills' latest higher price. Steel Wire Rod demand has remained relatively stable for longer than the market expected, with the economic slowdown extending far into the year and becoming less severe. Some market participants predict that Steel Wire Rod prices will decrease in April 2023 when deals stabilize and supply flow will improve due to better weather conditions. Meanwhile, other players predict that Steel Wire Rod prices will continue to rise until May 2023 because domestic companies are primarily out of stock. Even though the US Federal Reserve recently provoked some concerns in the banking sector, rising interest rates in the US market have not yet weakened the still-strong economy.

In Q1 of 2023, US service centers had scaled back their stockpiles to levels they would not normally operate at, worried about being stuck with high-priced inventory if demand fell off. In light of the tight supply and decreased steel mill utilization rates, many players are scrambling to find more Steel Wire Rods. Steel Wire Rod buyers have fewer options for competing suppliers due to the lower service center inventories, and many players report operating with inadequate stock levels of specific steel products. Several short-term steel mill outages are also affecting the US Steel Wire Rod market from Q1 to Q2 of 2023, with most deals occurring in the next 4-6 weeks. In tandem, steel imports have dropped, withdrawing a significant supply source that normally meets gaps when domestic supply is constrained and prices soar.

Furthermore, the US Department of Commerce (DOC) has declared antidumping duties on carbon and certain Steel Wire Rod products from a few Asian countries, such as South Korea, and major European regions, such as Belarus, Italy, Russia, Spain, Ukraine, and the UK. As a ripple effect, ChemAnalyst anticipates that the Steel Wire Rod prices will remain stable this month due to a muffled export market and an upturn in the domestic market because of improved weather. Although demand in the domestic Steel Wire Rod market is improving, scrap costs have increased this month. With high scrap prices and few imports, ChemAnalyst believes the market will anticipate a deal for a higher transaction price, allowing manufacturers to keep their bottom line intact.