US long steel prices were steady to a bit lower this week in thin trade amid reduced war jitters, and continued volatility in oil prices as media reports indicate the ongoing conflict in Iran could end soon, market insiders told SteelOrbis.
Insiders told SteelOrbis they expected US President Trump would announce hostilities will cease within two to three weeks at an address to the Nation the evening of April 1. The issue of the re-opening of the currently closed Stait of Hormuz, where about 20 percent of global oil supply flows, remained unresolved as of press time. At the evening address, Trump encouraged NATO members that utilize the strait for their countries’ commerce and oil supply to step up and provide security to the contested shipping lanes.
And, while US domestic long steel markets remain largely insulated from ongoing hostilities in the Middle East, the resulting increases in global oil prices has caused freight and transportation surcharges in the US to rise.
One shipper told SteelOrbis recently that domestic trucking costs currently were up about 20-30 percent as a result of boosted diesel fuel pricing, even as a road safety-related Federal crackdown on immigrant truck drivers continued to thin over-the-road driver ranks, he added.
And, as higher diesel pricing was expected to boost delivered finished steel prices by $0.50-1.00 a ton, reports of actual fuel-inspired price increases remained limited to those involving flat steel deliveries this week, insiders said.
At last report, the price of Brent crude oil on international markets traded between $108-109 a barrel (/bbl) on April 2, still up from about $75//bbl before Mideast hostilities began on Feb. 28, though off from more than $117/bbl reported Mar. 6. as fears of war-related supply disruptions rocked world oil markets.
In the domestic rebar market, Midwest rebar on an FOB mill basis sold on average $47.00-48/cwt., ($940-960/nt or $1,036-1,058/mt), off from off from $47.50-48.50/cwt., ($950-970/nt or $1,047-1,069/mt), one week prior. Insiders said current rebar lead times are improved as more productive capacity becomes available from Nucor, Lexington, as well as Hybar Steel. Lead times quoted for new production remain at 4-6 weeks, down from earlier reports at 6-8 weeks.
“Domestic mills are competing for inventory on the ground,” quipped one Midwest rebar insider. “People are excited that the war appears to be winding down, and trading can get back to a more normal place.”
And while most spot market long steel prices are starting to post steady to a bit lower, posted prices from mills have once again begun to rise. Nucor Bar Group announced on Mar. 25 that it would increase pricing for its larger-sized structural merchant bar products (MBQ) by $40-$60 per ton ($2.00/cwt- $3.00/cwt). A later April 1 customer letter from Nucor announced all sizes of wide flange beans, standard beams, channels, MCs, angles, and piling products would increase by $40/ton ($2.00/cwt.) All customer orders received by close of business April 2 would be price protected if shipped by April 22, Nucor said.
In the domestic wire rod markets, insiders told SteelOrbis prices remain flat for a third week, though supply is still reported tight and subject to potential price spikes, as supply from Peoria, Illinois-based Liberty Steel’s 700,000-ton wire and rod plant remains limited.
Average SteelOrbis spot prices for wire rod mesh on an ex-mill Midwest basis are reported steady for a third week at $49.00-50.00/cwt., ($980-1,000/nt or $1,080-1,102/mt).
In the April domestic scrap market, weekly SteelOrbis surveys indicated a continuation of a sideways to lower sentiment as the first week of April unfolds and eyes turn to the start of monthly scrap supply negotiations next week. Midwest prime grades are likely to settle steady to March settle values, while cut grades could potentially trade $10-20/gt lower, Midwest scrap insiders said.
