316 mildly magnetic
316ss can be made mildly magnetic by cold work. This happens in wire drawing. The corrosion spots can be contaminates from the drawing die. As Brion suggest the presences of rust spots could also be due to excessive inclusions (crap). On way to check the wire you have is ask vendor for production lot chemistry report and compare to ASTM specifications. Hope this helps some.
Goodwinds
DaveM
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