US Steel Wire Rod Prices Remain Stable in November Amidst Lowering Demand

In the US market, the price of Steel Wire Rods showed a static trend at the end of November as the demand from the downstream construction sector lowered. Additionally, the market players remained concerned about the tendency of the US federal interest rate hikes, keeping the market trend flat across the US spot market. The new deals are hoped to increase the price of Steel Wire Rod in the upcoming weeks as the McCarthy Building Companies Inc., Volvo, and U.S., Komatsu America Corp. show notable development.

The production of Steel Wire Rods in neighboring countries, such as Mexico, has seen a notable decrease in the production rate despite an increase in rebar production. Specifically, the monthly production of Steel Wire Rods in these neighboring countries has decreased by 6.5%. This decrease has consequently impacted the supply of Steel Wire Rods in domestic warehouses across the USA. Market observers anticipated a potential price increase, influenced by the upward trajectory in upstream coking coal and steel scrap prices in both local and international markets.

However, in contrast to the expectations of a price hike, the demand for Steel Wire Rods from downstream construction industries in the USA remained stagnant. Despite initiating three major construction projects, the industry faced challenges due to high-interest rates and tight credit conditions. These factors have hindered construction activity and are expected to continue doing so shortly. The total construction starts in the USA experienced a 7% decline in October, reaching a seasonally adjusted annual rate of USD 1.1 trillion. This drop was attributed to a widespread slowdown in gas and utility projects, hindering the growth rate of Steel Wire Rods in the US spot market. Market analysts predict that the Federal Reserve is likely to refrain from further rate hikes in the foreseeable future. However, any consideration of easing measures will take time. The construction industry is expected to witness a continued softening in sales over the coming months. Despite this overall trend, there was a positive development in the non-residential construction segment of the US Steel Wire Rod market. This category, encompassing commercial, institutional, and manufacturing projects, saw an 8% increase in October. The seasonally adjusted annual rate reached USD 490 billion, primarily driven by manufacturing activity. Key contributors to this positive trend were three significant projects. These include the USD 7.5 billion Micron semiconductor fabrication facility in Boise, Idaho; the USD 2.2 billion Hyundai and LG EV battery plant in Ellabell, Georgia; and the USD 1.5 billion Nucor Sheet Mill in Apple Grove, West Virginia. These non-residential construction projects stood out as bright spots in an otherwise challenging US Steel Wire Rod market landscape.

According to ChemAnalyst, the Steel Wire Rod prices are expected to show a slight rise in the upcoming week as the mega projects support the demand side for US Steel Wire Rods. Additionally, the production of Steel Wire Rods would likely decrease as the arrival of winter hampers the manufacturing rate across the US spot market.