US import rebar and wire rod markets were flat this week as market insiders pondered the effects new Section 232 tariffs, which began on March 12, will have on their business. Insiders expect US prices will continue higher, which might make added room for imports to compete, though existing supply chains could have to be re-engineered.
In addition to new 25 percent import tariffs on all imports, the new rules put forth by the Trump administration eliminate previous general and country-specific tariff exclusions, as well as cover all listed derivative steel products, such as automotive, construction, and consumer products. “Melted and poured” as well as “smelted and cast” reporting is due for all steel articles and their derivative products.
In the imported rebar markets, following last week’s $1.00/cwt., or $20/nt ($22/mt) increase leading up to the start of tariffs, pricing for import rebar on a loaded truck basis at the US Gulf and US East Coast was flat at $36.75-37.75/cwt. ($735-755/nt or $810-832/mt).
Market insiders told SteelOrbis that as the price of imported steel is expected to rise significantly, further levity is expected to be granted to US domestic mills to continue to raise their prices.
“Overall, the uncertainty (of tariffs) will likely lead to short-term volatility, but a tariff decision on March 12 and April 2 could dictate long-term market direction,” one Mexican long steel market insider told SteelOrbis. “If imposed, expect higher domestic prices and a restructuring of supply chains in Q2.”
While no new offers were heard from importers this week, offers from Egypt on a delivered-to-customer basis are last discussed at $37.00-38.00/cwt. ($740-760/nt or $816-838/mt), up from a prior weekly average $36.50/cwt. ($730/nt or $805/mt). No new offers were heard on May transits of import rebar from Vietnam, which remains flat at $34.50/cwt. ($690/nt or $761/mt).
Following the start of Section 232 tariffs, Mexican markets remain quiet with import rebar on a loaded truck basis vicinity Houston, Texas, last offered at $38.00-40.00/cwt. ($838-882/mt), or $760-800/nt.
On the import wire rod mesh front, import material on a DDP loaded truck basis USG was assessed steady following earlier $0.50/cwt. ($10/nt or $11/mt) gains to $37.50/cwt. ($750/nt or $827/mt). Traders said import wire rod pricing is likely to remain a less attractive option even as domestic prices are expected to rise as output from Liberty Steel’s wire rod plant in Peoria, III. likely won’t be available until at least the end of April.
Import contacts said they would expect additional long steel price increases in the US to come initially from mills as they react to increases in the monthly price of March scrap, which settled an average $20-30/gt ($20-30/mt) higher in markets in the eastern two-thirds of the US. March shredded scrap in the vicinity of Chicago settled at $455-460/gt ($462-467/mt), up $30/gt ($30/mt) from February.
“Once the monthly scrap prices settle, we should see further price increases coming for long steel products from the mills,” one long steel market insider told SteelOrbis. “Right now, not all of the most recent increase have been fully accepted by the market, but at some point higher US prices could make some limited imports more competitive.”
“We’re expecting to see an increase... on domestic rebar and MBQ,” the Mexican long steel insider added. “Right now, customers are not willing to take good orders from rollings due to Section 232 tariff uncertainty, with many preferring to wait until there is more clarity.”
Current import pricing for rebar and wire rod remains mostly non-competitive versus those offered by domestic mills, insiders say. Future increases on the part of domestic mills might make imports more viable, but domestic prices have a long way to go given 25 percent premiums attached thus far on imports.
Market insiders told SteelOrbis that initially, steel supply chains will likely try to absorb some of the tariff-inspired price increases as much as they can, however, whatever can’t be absorbed will have to be ultimately passed along to the customer, be it a manufacturer or another steel consumer such as fabricators. “I don’t think the tariffs will create a big supply shortage in the US, however, it will likely cause prices to rise,” one insider recently told SteelOrbis.