US domestic rebar pricing was slightly higher this week as markets reacted to an unexpected rebar price increase late last week from Irvine, Texas-based Commercial Metals Corp. (CMC), while wire rod held onto recent price premiums, settling flat on the week, even as production from a key US Midwest wire and rod mill remains cut, market insiders told SteelOrbis this week.
While no new information was made available from Peoria, Illinois-based Liberty Steel, insiders said production from the 700,000 ton a year wire and rod mill remains offline. With 350,000 tons per year of its total capacity dedicated to production of wire rod, spot market pricing recently has increased as supply remains reduced. Insiders told SteelOrbis the ongoing Liberty outage likely is the reason for recent price increases from CMC, and could likely prompt other mills such as Nucor to raise its prices. The last $20/nt ($1.00/cwt.) price increase from Nucor for its wire rod products was sent to customers on October 16.
“We saw a $30/nt price increase on rebar last week from CMC, but Nucor hasn’t followed yet as many expected,” one long steel market insider told SteelOrbis this week. “The price increase largely came as a surprise to the markets, and basically stopped the super discounting that the mills were doing to move product and keep imports from grabbing market share.”
In the weekly rebar spot markets, domestic supply on an FOB mill basis is assessed with most transactions noted at $35.00-37.00/cwt. ($700-740/nt or $771.62-815.71/mt), on average $36.00/cwt. ($720/nt or $793.67/mt), up slightly from seven days ago.
On the domestic wire rod front, most transactions on a delivered to customer basis were reported this week at $39.00-41.00/cwt. ($780-820/nt or $860-904/mt), or an average of $40.00/cwt. ($800/nt or $882/mt), unchanged from seven days ago.
“The wire rod market has been quiet this week,” a market insider told SteelOrbis. “Most people have been continuing to draw down inventory on the ground ahead of the US election results instead of restocking inventory.”
Market insiders said this week’s election of Donald Trump as the 47th US president, and this week’s one-quarter point decrease in the US Federal Reserve’s overnight lending rate to a target range of 4.50-4.75 percent, could help spur an increase in US construction spending, though the effects on long steel pricing could remain muted until the 2025 construction season commences in early spring. The next Fed meeting is scheduled for December 18, with most economists expecting another quarter point decrease.
Following the November 5 election, market insiders said they felt more confident about their outlook for pricing for the remainder of 2024. “People expect flat pricing until the end of the year,” said one a flat steel trader, while another domestic scrap steel insider remarked, “Trump is a friend to our industry.”