US domestic rebar and wire rod pricing advanced this week in limited trade ahead of the March 4 implementation of 25 percent import tariffs on Mexico and Canada. US President Trump also doubled down on China tariffs, increasing their rate from a previously-announced 10 percent to 20 percent.
Market insiders said the new tariffs are likely to cause steel prices to rise substantially, though potentially, not right away. “While we haven’t yet seen a price increase from the mills, we can expect to see further price increases once renewed Section 232 tariffs on steel and aluminum go into place on March 12,” one Gulf Coast long steel market insider told SteelOrbis. “After these later tariffs go into play, these so-called ‘stacked tariffs’ could see tariff rates on Mexico and Canada increase to 50 percent.”
The long steel market insider said that while most supply requirements in the near term are likely to be met with domestic supply, he added that buyers requiring specific grades of steel from abroad may have to pay the expected higher tariff-inspired prices once tariffs for steel and aluminum come into play.
In the weekly rebar spot markets, domestic supply on an FOB mill basis is assessed with most transactions noted at $40.00-41.50/cwt. ($800-830/nt or $882-915/mt), on average $40.75/cwt. ($815/nt or $898/mt), up $1.00/cwt. ($20/nt or $22/mt) from seven days ago.
In the domestic wire rod market, most transactions were reported this week at $43.00-44.00/cwt. ($860-880/nt or $948-970/mt), or an average of $43.50/cwt. ($870/nt or $959/mt) delivered to customer, up $1.00/cwt. ($20/nt or $22/mt) from seven days ago.
On the supply side, Liberty Steel announced they have secured financing and will re-open by the middle of March. However, according to a wire rod market insider, “most, if not all, of their production will go to their downstream facilities at first, with sales to the domestic market possible by the end of April.”
In his March 4 address to the US Congress, President Trump said reciprocal tariffs on all products will follow on April 2.
“We can expect a big price increase coming up which will jolt the market,” one market insider told SteelOrbis.
Another insider offered his take on the immediate effects of tariffs on the steel market.
“Maybe Trump will be able to re-negotiate these existing tariffs, however, for the time being, Mexico and Canada are in effect out of the market for future steel market deliveries.”