For a second week, import long steel prices were reported steady, following an earlier freight-related price adjustment higher, as war-related uncertainty continues to stress global energy and commodity supply chains, market insiders told SteelOrbis this week.
Despite some small token measures by Iran to move oil supply through the Strait of Hormuz, where about 20 percent of world oil supply transits, the international oil route remains effectively closed, as Iran and its adversaries trade blows even as negotiations continue toward an end to regional hostilities now approaching a fifth week.
Following the April 1 US nationwide address by US President Trump announcing the expected end to Iran actions within 2-3 weeks, financial and energy markets remained mixed. While oil prices trended higher on continued uncertainty, the Dow Jones Industrial Average trended lower.
And while global commodity markets remain in flux, a potential end to regional hostilities appears to be improving steel market sentiment.
“Oil might drop below $100 a barrel [/bbl] and help transportation costs decline,” said one US Midwest-based long steel importer, ahead of Trumps nationwide address. “People that I talk to are pretty excited that the ongoing war could end soon and trade will return to more normal levels.”
Following Trump’s speech, which gave Iran more limited options to end the conflict, including opening the contested strait of Hormuz, oil prices bumped higher, rising toward $110/bbl, though still off from the recent high of near $118/bbl registered on Mar. 6.
On the US Gulf Coast, import rebar on a loaded truck basis remains flat for a fifth week following an earlier $0.50/cwt., freight-related price adjustment to $44.50-45.50/cwt., ($890-910/nt or $981-1,003/mt). US East Coast import rebar pricing on a loaded truck basis also remains stable to week-ago levels at $45.00-46/cwt., ($900-920/nt or $992-1,014/mt).
With regard to international rebar supply, on March 31, the US International Trade Administration (ITA) finalized countervailing duty (CVD) rates for Algerian rebar at 72.94 percent. And, if Algeria’s actions are found to have caused material injury, or threatened US industry, ITA could make the Algerian CVD duties permanent, and thus would be added to the recent 127.32 percent dumping margins assessed March 3 by the US Department of Commerce.
“As far as global steel markets go, more talk about an end to hostilities with Iran is not a bad thing,” the Midwest importer added. “Fuel prices will go down, as will the price of everything else that moves through the Strait, to include food and water. Trade flows are going to improve.”
Following recent reports of scant supplier activity as a result of rising fuel surcharges, import pricing for wire rod mesh on a DDP loaded truck basis Houston, Texas, continued flat at $46.50-47.50/cwt., ($930-950/nt or $1,025-1,047/mt), though up from $46.00-47.00/nt ($920-940/nt or $1,025-1,047/mt) reported in SteelOrbis surveys three weeks earlier.
“Wire rod remains one of the tightest products in long steel markets, with a high probability of a near-term price increase,” remarked one US Gulf Coast importer to SteelOrbis. “We see strong upside potential, especially if US manufacturing improves, and infrastructure demand accelerates.” He continued, “There continues to be limited offers of wire rod available from Vietnam, with prices up about $60/mt. Rising import replacement costs, reduced production from key suppliers, and capacity cuts abroad will continue to remain supportive for pricing near term.”
