US domestic long steel prices continued steady to down for a third week on scant mid-month demand and stability in global oil prices, as reports indicate US spring construction activity remains muted and a recently announced US blockade on oil deliveries through the contested Strait of Hormuz appears to be holding the line on global oil price increases for now, market insiders told SteelOrbis.
Recently, finished steel market insiders told SteelOrbis that resulting increases in global oil prices had caused US freight and transportation surcharges on spot steel deliveries as well as building materials 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.
The US national average diesel price stands at $5.61 per gallon (/gal) on April 16, off from $5.64/gal one week prior, though still up significantly from one year earlier, when the national average price was reported at $3.64/gal. West Texas Intermediate crude oil -the US benchmark oil grade- was priced at $92-94/bbl (March 16), fairly steady to week-ago levels, though price volatility remains high as the situation in the Strait of Hormuz, where 20 percent of global oil shipments flow, remains tenuous.
“US rebar markets are sluggish,” commented one Eastern US rebar dealer, when asked about this week’s spot trade in long steel. “Spot tons are being made available due to Hybar Steel selling cheap tons into the spot marketplace. We’re seeing new pricing at $43-46/cwt at the mill.”
In the domestic rebar market, Midwest rebar on an FOB mill basis sold on average $46.00-47.00/cwt., ($920-940/nt or $1,014-$1,036/mt) off $0.50/cwt., from the $47.00/cwt., ($940/nt or $1,036/mt) average price reported one week prior.
Insiders told SteelOrbis current rebar lead times remain steady versus week ago levels at 4-6 weeks as more productive capacity continues to be made available from Nucor, Lexington, as well as Hybar Steel in Arkansas.
In the domestic wire rod markets, insiders told SteelOrbis prices remained stable for a fifth 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).
Insiders claim recent construction activity continues to stumble, causing limited demand for new rebar and wire rod orders.
Recent reports from the Associated General Contractors of America (AGC) show construction spending slipped 0.3 percent from December to January as declines in both private residential and nonresidential activity outweighed gains in public construction. Association officials noted that the data highlights the continued impact of economic uncertainty on construction demand.
“Rising construction costs and uncertainty over the impact of tariffs, war in the Middle East, and a slowing economy are leading to slowdowns and cancellations of many project types,” said Ken Simonson, the association’s chief economist. “Aside from investment in data centers and residential improvements, other private construction categories have been slumping for the past year.”
Contractors have reported being hit with rapidly increasing fuel surcharges on the thousands of deliveries of materials and equipment to job sites, AGC said in a recent report. That’s in addition to the direct cost of fuel they buy for their trucks and construction equipment.
“Because contractors can seldom pass along cost increases after committing to a project, these extreme, sudden jumps are causing major hardship,” AGC CEO Jeffrey Shoaf said. “In addition, uncertainty over future costs and demand for structures may cause owners to delay or cancel previously planned projects, adding to contractors’ woes and slowing economic growth.”
