US import long steel pricing was stable this week following reports indicating a mixed pricing situation one week earlier, even as the market was taken aback after several key US mills announced a $40/ton price increase for merchant bar quality steel (MBQ), market insiders told SteelOrbis this week.
On Friday, Oct. 17, Irving, Tx.-based CMC Steel, announced a $40/ton ($44/mt) increase in its customer prices for MBQ steel. Following CMC’s announcement, on Monday, Oct. 20, Fort Wayne, Indiana-based Steel Dynamics, Inc., (SDI), Tampa,Fla.-based, Gerdau North America, and Houston, Tx.-based Deacero also announced their own $40/ton MBQ price increases. Interestingly, as of press time, Charlotte, NC.-based Nucor has yet to announce an equivalent increase. Insiders told SteelOrbis a lack of action by Nucor on MBQ might cause the recent price increase to be not accepted by the market.
“Domestic and import rebar and wire rod pricing are status quo this week,” commented one US Gulf Coast steel importer. “Considering how tight the domestic long steel markets remain at the moment, I would have expected a price increase announcement to come for rebar and not for MBQ,” he said. “As Nucor has yet to announce an increase, and they typically don’t like to follow the direction of other mills, it’s hard to believe that the price increase will be accepted by the marketplace. I’m thinking that if [Nucor] doesn’t announce a price increase by Friday, [Oct. 24], it’s unlikely to be accepted by the market.”
Another SteelOrbis insider commented on this week’s MBQ price increases. “For the other mills, I think it was a way to just extract another $40/nt from the market,” he said. “For Nucor though, they have much more significant downstream interests, and right now, it may not be a good time for them to raise prices. If Nucor fails to come out with an equivalent increase, I think the other mills will rescind their price increases, because most don’t want to have to start discounting programs again to maintain current customers.”
As reported previously in weekly SteelOrbis long steel market reports, US long steel mills continue to allocate supply because of ongoing sharp reductions in imports, the result of ongoing 50 percent steel tariffs and as 4th quarter mill maintenance operations continue. Spot prices are likely to remain little changed near term, insiders say, as US infrastructure spending continues to lag, even though long steel demand from data center construction activities continues to lend limited support.
On the US Gulf Coast, import rebar pricing is reported steady for a second week at $44.00-45.50/cwt., ($880-910/nt or $970-1,003/mt), following earlier reports that pricing had risen slightly from $43.50-45.50/cwt., ($870-910/nt or $959-1,003/mt) levels, amid reports of shrinking Gulf Coast inventories.
On the US East Coast, import rebar on a loaded truck basis remains unchanged for a second week at $44.00-46.00/cwt., ($880-920/nt or $970-1,014/mt). East Coast rebar importers expect local rebar to maintain its current limited premium to US Gulf Coast pricing owing to the continued paucity of imports heading into the 4th quarter.
“We’re hearing some limited December East Coast rebar import offers at $46.50/cwt., ($930/nt or $1,025/mt) which are unfortunately not that attractive, because the pricing still remains too close to domestic,” the East Coast rebar insider told SteelOrbis. For smaller customers though, we’re also hearing some limited offers from existing stock at $48-49/cwt., but those numbers are currently out of the market and unlikely to transact.”
On the raw materials front, during October scrap supply negotiations, US Midwest shredded scrap -a key US grade referenced in domestic rebar production- settled $10/gt lower on average at $365-370/gt ($371-376/mt). The current November US Midwest and East Coast scrap outlook is seen sideways for a second week, though insiders caution it remains fairly early to predict monthly supply discussions. And, as was reported earlier by SteelOrbis, recent US mill additions to domestic rebar production have yet to have a significant impact on reducing spot prices, especially since tariffs continue to slash imports.
“Export scrap flows to Turkey strengthened slightly recently, but US domestic availability remains comfortable, especially in the Midwest,” commented one US Gulf Coast long steel importer on the November scrap outlook. “The rebar to scrap spread remains near a two-year high at $628/nt ($681/mt), a strong indicator of mill profitability and cost stability.”
On the imported wire rod front, following minimal week-ago increases, CFR US Gulf Coast basis Free-Out wire rod mesh pricing is reported steady at $600-610/mt, not inclusive of Section 232 tariffs, spot traders told SteelOrbis this week. Wire rod mesh on a DDP loaded truck basis on the US Gulf Coast is discussed steady at $42-43/cwt., ($840-860/nt or $926-948/mt), though trading remains limited with Peoria, Illinois-based Liberty Steel reported to be operating near capacity, and several US mills in the US South and Southeast continuing to ramp up capacity, insiders said.