US rebar and wire rod markets remained stable again this week, though declining global energy prices as a result of reduced Mideast tensions with Iran might offer some price relief soon, insiders told SteelOrbis this week.
Following the June 18 signing of an interim memorandum of understanding (MOU) between the US and Iran, calling for a 60-day cessation of hostilities to hammer out a more permanent peace deal, global oil prices retreated on June 25 to levels unseen since the Mideast conflict began on February 28. US benchmark West Texas Intermediate crude (WTI) traded at $70.50-70.95 per barrel (/bbl), while global Brent crude oil traded between $72.00-74.50/bbl.
Domestic steel suppliers recently have increased the delivered price of long steel and other finished steel products because of higher diesel fuel prices inspired by the ongoing Iran conflict. On news that the Strait of Hormuz was closed, restricting access to about 20 percent of global oil supply, oil prices spiked to more than $118/bbl in the days following the start of hostilities, with steel importers and commodity shippers later announcing substantial freight and fuel surcharges to cover increased fixed costs to customers. And while long steel imports into the US remain low as a result of Section 232 steel tariffs, many import suppliers choose the much more expensive option of diverting shipping around the contested strait in order to safely supply customers here and abroad.
“Domestic producers have largely held pricing steady as supply and demand remain balanced,” said one US Gulf Coast based steel insider. “Elevated freight costs, stable scrap expectations and a relatively narrow spread between domestic and import offers continues to support current price levels,” He continued, “The market remains orderly with little incentive for aggressive discounting by the mills.”
In the domestic rebar market, Midwest rebar on an FOB mill basis remained steady for a sixth week at $47.00-48.00/cwt. ($940-960/nt or $1,036-1,058/mt), up from $46.00-47.00/cwt., ($920-940/nt or $1,014-1,036/mt) earlier.
Long steel importers report rebar pricing on the US Gulf Coast for September delivery near parity with recent domestic sales at $49.00-$50.00/cwt., however, longer lead times and continued market uncertainty continues to give domestic steel producers and edge over scant imports in week-to-week spot trade, they said.
And even as US mills continue to produce more supply to cover increased data center and infrastructure-related steel requirements, local supplies remain tight for truckload quantity tonnage, especially in the Midwest, insiders added.
On the US construction front, media reports indicate rising construction input costs remain one of the key challenges for the US construction industry with prices said to have risen again during April and May largely due to elevated energy costs and tariffs. Regardless of the higher pricing, which some estimate has increased by 4-7 percent since the beginning of the year, construction backlog was reported to have reached a 10-month high during April.
