US domestic rebar and wire rod prices were stable to down slightly this week as supply remains abundant while spot market demand remains unremarkable, market insiders told SteelOrbis this week. Lower domestic scrap pricing for May combined with the continued ramp up of crucial wire rod production by Liberty Steel also is expected to pressure prices lower in the near term, they said.
In the weekly rebar spot markets, domestic supply on an FOB mill basis is assessed with most transactions noted at $37.50-39.00/cwt. ($750-780/nt or $827-860/mt), on average $38.25/cwt. ($765/nt or $843/mt), unchanged from seven days ago. “Domestic rebar is trending down in anticipation of lower scrap,” said a SteelOrbis rebar insider. “More stormy weather in Texas has not helped the spot market either,” he added.
“The Texas market is flooded with rebar,” said another rebar market insider. “We’re seeing real heavy stock levels at the ports because of solid imports coming in.”
“There’s definitely an oversupply situation going on in Texas,” said yet another rebar market insider. “We’re hearing pricing below $36.00/cwt. ($720/nt or $794/mt) on some discounted rebar sales for stock that’s already on the ground in Texas. Vietnam and Algeria have been pretty aggressive moving in imports.”
The insider added that he expects that domestic prices could decline further once monthly scrap pricing settles are announced by major steel trade data providers such as SteelOrbis.
“I think that once the scrap settles come out for May, we could see further declines in long steel,” he added.
While no monthly scrap settle numbers are yet available as May negotiations continue, based on the latest down $20/gt average weekly market call for May, US Midwest busheling scrap could settle near $445-470/gt ($452-478/mt), or on average $466/gt ($473/mt), off from its April $465-490/gt ($472-498/mt) settlement. May shredded scrap, which settled $40/gt less during April supply negotiations to $415-420/gt ($422-427/mt) is seen another $40/gt ($41/mt) less for May at $375-380/nt ($381-386/mt). May HMS 1, which settled $30/gt less for April at $365-385/gt ($371-391/mt), is seen another $30/gt lower at $335-355/nt ($340-361/mt). P&S scrap, which settled $40/gt lower for April at $401-411/gt ($407-418/mt) is seen $30/gt less at $371-381/nt ($377-387/mt), market insiders said.
In the domestic wire rod markets, prices headed a bit lower for the first time in three weeks with most transactions reported this week at $45.00-46.00/cwt ($900-920/nt or $992-1,014/mt), or an average of $45.50/cwt ($910/nt or $1,003/mt), down $0.50/cwt ($10/nt or $11/mt) from seven days ago. Insiders said wire rod pricing has begun to dip as Peoria, Illinois-based Liberty Steel continues their start-up procedures. Most contacts expect wire rod pricing to continue under pressure as Liberty begins to ramp up its daily wire rod production toward its combined 700,000 ton per year wire and wire rod capacity.
“The trend is now down for domestic wire rod because of lower May scrap and continued low domestic demand,” the insider added. “Even overseas, the market is not good.”