US import long steel prices were largely stable this week, following recent demand-related declines, as market insiders told SteelOrbis reduced Middle East uncertainty was likely to cause the energy component of the delivered price of steel to decline.
This week, Iran and Oman announced a plan to route shipping traffic through lanes of its choosing in contested Strait of Hormuz. US representatives said the plan represents “progress” though the US president remains firmly against giving Iran any authority over international traffic.
This week's price stability is in stark contrast to one week ago, when prices dipped about $0.50/cwt., amid continued thin US demand for imports, and lower oil prices, even as the US-Iran conflict was seen as spreading further through the Middle East as Iran launched surprise missile attacks against several of its Middle East neighbors.
Even as US military activity in the region remains active, global oil prices continued to decline today with benchmark Brent Crude oil traded August 6 at $82.64 per barrel, off slightly from week-ago levels, though still up sharply from one year ago when the global oil benchmark barrels sold at $66.89/bbl. US benchmark West Texas Intermediate crude oil (WTI) traded Aug. 6 at $76.62/bbl, up slightly from the day before, a trend of up-and down price activity noted recently as markets react to swiftly changing events in the Middle East.
Shipping sources told SteelOrbis that since the war with Iran began in late February, shipping rates between the US and the Middle East have nearly doubled, mostly due to a 55 percent surge in maritime bunker fuel prices and sharply higher war risk insurance premiums. Recent fuel surcharges from major carriers ranged between $65 and $165 per shipping container following the latest Middle East hostilities, shipping experts told SteelOrbis. More importantly, so-called “War Risk Surcharges” of between $1,500 and $3,500 per container were reported by various ocean carriers such as Hapag-Lloyd, sharply boosting the cost of delivered freight, including steel.
Insiders said ocean freight rates remain elevated though flat this week despite lower global oil prices. On the US East Coast, the cost of bulk freight rose to $50/mt CFR from Turkey two weeks ago from $44-46/mt the week prior.
At the US Gulf Coast, loaded truck rebar is reported steady at $44.00-45.00/cwt., ($880-900/nt or $970-992/mt), following last week's $0.50/cwt., decline from $44.50-45.50/nt ($890-910/nt or $981-1,003/mt). US East Coast material was also reported steady at $45.00-46/cwt., ($900-920/nt or $992-1014/mt), though off from $45.50-46.50 ($910-930/nt or $1,003-1,025/mt) two weeks earlier.
In the import wire rod markets, wire rod mesh on a DDP loaded truck basis at the US Gulf was discussed steady at $46.50-48.50/cwt., ($930-970/nt or $1,025-1,069/mt), following two weeks of recent declines from $47.00-49.00/cwt., ($940-980/nt or $1,036-1,080/mt).
