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EU producers target Feb drawing wire rod settlement hikes - 9 January 2012

Prices for drawing quality wire rod are expected to rise in Europe for February settlements, as producers try to pass on scrap increases and clients need to restock, Steel Business Briefing learns from market participants.

Producers of medium and high carbon wire rod are targeting an increase of up to €50/tonne on January settlements. However, purchasing managers doubt whether the entire increase will pass.

“We will define the monthly contract by mid-January. We expect an increase from the low registered in January’s settlement, but it is unlikely producers will achieve fully the increase they are planning,” a purchasing manager in Belgium tells SBB.

This follows a slight decline in January settlements, decided in mid-December, which were down €10-20/t m-o-m to a level close to €610-630/t ($777-803/t) ex-works for high carbon grades and €570-580/t ex-works for medium carbon grades, SBB understands.

End-user stocks are believed to be medium-low after destocking activity was seen during the last months of the year and apparent demand was slow. “We reached a particularly low stock level in December. We are now in need to buy for our January needs as well,” the Belgian source continues.

Meanwhile, low carbon grades have started their price recovery earlier in December. Buyers have registered increases before the winter break and expect further €10-20/t increases in January. A major mill confirms the intention to raise prices by €20/t from next week, while stressing that a €40/t increase has been seen December already. Prices are believed to be around €550-560/t ex-works.

 

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