US import rebar and wire rod prices were steady this week, though prices could trend lower near term as reports indicate available domestic long steel inventory remains high on the US Gulf Coast, as monthly scrap prices could trend sideways to lower for now a third straight month, market insiders told SteelOrbis this week.
On the US Gulf Coast, import rebar on a loaded truck basis in Houston is discussed steady at $35.00-37.00/cwt., or on average $36.00/cwt., or $720/nt ($794/mt), off from $35.50-37.50/cwt. ($720-760/nt or $794-838/mt) two weeks earlier. May import shipments from Egypt, Algeria and Vietnam for late-June-late-July delivery into the US Gulf Coast are last discussed flat at $35.50-36.50/cwt. ($710-730/nt or $783-805/mt).
Regarding US long steel demand side, media reports indicate that less than half of the $1.2 trillion allocated in March of 2021 as part of then President Biden’s Infrastructure, Investment, and Jobs Act (IIJA) has yet to be allocated for new and existing infrastructure projects expected to spur demand for rebar, even as the three-year point passed recently of the five-year program that ends in 2026.
On the mill side, insiders told SteelOrbis that the 1.63 million tons of new annual rebar capacity added at three new rebar mini-mills in the US, expected to be operational by Q3, was built to address the anticipated growth in infrastructure development projects for new and existing bridges, roads and tunnels as part of the IIJA.
“The recent start of the 700,000-ton-per-year Hybar rebar mill in Arkansas is expected to put more (downward) pressure on (rebar) prices,” the rebar insider added. “And while rebar prices could fall as more capacity comes online, scrap prices could rise.”
As additional US long steel production capacity comes online this summer, insiders said that the resulting expectation of lower rebar prices could also further reduce demand for imports, even though scrap prices could rise.
“Scrap could go up,” said another US East Coast rebar insider, commenting on the increased US rebar production expected in Q3. “There are three new mills that will need scrap,” he said. “But will the Nucor mill iLexington, North Carolina (with a capacity of 430,000 tons) and the Commercial Metals Company mill in Martinsburg, West Virginia (with a capacity of 500,000 tons) just shift scrap tons from their other mills to the new rebar mills? If so, there won’t be an increase in demand for scrap, just a shift in supply.”
He added: “Plus, if there is a better domestic market for scrap, less will be exported. So, I don’t think increased domestic mill demand will affect the scrap pricing by too much.”
“Pricing is still softening all over,” he added. “We expected a drop in long steel prices, but if scrap prices fall again, I am certain we will see one,” he said.
This week, expectations for June scrap prices were more mixed, with insider sentiment for June ranging from sideways to down $30-40/gt to sideways to $10-20/gt higher.
“There’s a scrap supply overhang in the Houston market of about 300,000 tons,” a Houston-based scrap dealer told SteelOrbis. “Mexico has been out of the spot markets for almost three months, so inventories remain high.”
In the Mexican long steel export market, trading is described as “okay but not great” as ongoing 25 percent tariffs continue to limit available spot trading opportunities, according to import insiders. Import rebar on a loaded truck basis vicinity Houston, Texas, from available US stock is reported steady at $36.75-38.75/cwt. ($735-775/nt or $810-854/mt).
“Yes, there’s still a noticeable surplus of imported rebar at the Texas ports, much of which arrived before the reinstatement of Section 232 tariffs on countries such as Bulgaria. While some material has moved, the pace has been slower than usual due to both weather-related disruptions and muted regional demand,” another long steel insider said.
Contacts tell SteelOrbis that, with Section 232 steel tariffs of 25 percent are now in effect, import shipments of rebar from North Africa, Malaysia, and Vietnam are likely to rise, as buyers adjust their supply chains in response to shortfalls from previous sales originating from Bulgaria and the Ukraine, countries which were previously exempt from US import tariffs, but are no longer
Prices for imported rebar from the ground on the US Gulf Coast on a CFR, free-out basis were discussed flat at $605-625/nt ($667-689/mt), following recent declines from $615-635/nt ($678-700/mt) two weeks earlier.
In import wire rod markets, prices on a DDP loaded truck basis on the US Gulf remained steady versus a week earlier at $36.50-37.50/nt ($730-750/nt or $805-827/mt).
“Imports of wire mesh are not selling well,” commented the import long steel insider.
Insiders said future demand for long steel imports could be more limited in the near term as domestic rebar pricing has fallen slightly amid limited demand and continued reports of high supply. Meanwhile, wire rod pricing has remained flat, despite unconfirmed reports that production at the recently reopened Liberty wire and rod plant in Illinois might be in jeopardy due to new financing issues, which might lead to new production issues.
