US long steel prices were steady to slightly lower for a second week, amid reports that US mills had made more rebar supply available even as US oil prices slumped following the April 7 two-week ceasefire announcement between the US and Iran, insiders told SteelOrbis.
Among other key issues, the US-Iran ceasefire calls for safe passage of all shipping through the contested Strait of Hormuz, where 20 percent of the world’s oil moves. On April 8, US benchmark West Texas Intermediate (WTI) crude oil traded for May delivery at $95 per barrel (/bbl), a one-day drop of more than 16 percent following the announcement. And, while oil prices were down sharply, WTI prices remain nearly 42 percent higher than they were before hostilities started Feb. 28.
“The Iran-US ceasefire has cooled things off a little,” remarked one US Midwest long steel insider. “Transportation costs are improving everywhere as a result of lower global oil prices.” He continued, “The recent news of a ceasefire has been good, and oil prices are declining. The hope is that this war will end soon, and markets will move back to where they were before the hostilities began.”
And, while US domestic long steel markets remain largely insulated from potential hostilities in the Middle East, the resulting increases in global oil prices has caused US freight and transportation surcharges to rise, some say as much as 20-30 percent. SteelOrbis market insiders claimed higher diesel pricing alone was expected to boost US delivered finished steel prices by $0.50-1.00 a ton.
In the domestic rebar market, Midwest rebar on an FOB mill basis sold on average $46.50-47.50/cwt., ($930-950/nt or $1,025-1,047/mt), off $0.50/cwt., from the $47.00-48/cwt., ($940-960/nt or $1,036-1,058/mt), reported one week earlier. Insiders said current rebar lead times remain improved at 4-6 weeks as more productive capacity is made available from Nucor, Lexington, as well as Hybar Steel.
“In the US, we’re seeing more supply availability,” the Midwest insider added. “Hybar steel in Arkansas is now offering domestic rebar supply at $44.00-45.00 per cwt., which is bringing average spot values down a bit versus a week ago.”
“We’re not seeing much change in pricing this week,” reported still another US East Coast rebar insider to SteelOrbis. “Everyone’s waiting for demand to come back, so things remain pretty quiet.”
In the domestic wire rod markets, insiders told SteelOrbis prices were stable for a fourth week, though reports of tight supply persist as supply from Peoria, Illinois-based Liberty Steel’s 700,000-ton wire and rod plant remains limited, they said.
Average SteelOrbis spot prices for wire rod mesh on an ex-mill Midwest basis remain flat at $49.00-50.00/cwt., ($980-1,000/nt or $1,080-1,102/mt).
“Wire rod continues to show relative strength versus rebar, with tighter supply and higher sensitivity to cost inflation,” said another US Gulf Coast long steel insider. “This segment is likely to move higher first.”
In the domestic ferrous scrap market, weekly SteelOrbis surveys indicate April Midwest scrap traded sideways for prime grades and at a $20/gt discount to March values for cuts and shredded scrap grades, insiders said. Discussions of potential $30/gt discounts for cuts and shredded grade scrap discounts to March pricing in the US South remained unconfirmed at press time.
