US domestic rebar and wire rod markets continued lower this week as August scrap settled sideways to July after being talked higher earlier in the month, market insiders told SteelOrbis this week.
Domestic rebar is discussed $2.00/cwt. less ($40/nt or $44/mt) at $34.50-36.50/cwt. ($690-710/nt or $761-783/mt) on a delivered to customer basis with larger orders accounting for the lower end of the trading range, market insiders said. Some market insiders predict domestic rebar pricing could continue to decline to $30/cwt. ($600/nt or $661/mt) if scrap prices fail to rebound from recent lows.
“Even though some mills have claimed that scrap prices were up, that’s not the case,” said one Midwest rebar dealer. “Mills are not pushing prices up for finished goods, and most are willing to negotiate discounts with customers, especially with those with big orders in hand.”
Rebar dealers report US West Coast mills PSG Steel and CMC Steel were infighting with each other over customer budgets, offering significant discounts to secure the movement of August tons after August scrap failed to increase.
“It clearly has not bottomed out yet,” the rebar dealer said of domestic rebar prices. “If scrap does not go up, prices could fall as low as $30/cwt. in the short term. Wire rod prices increased about a month ago, but I’ll bet that those increases fail to stick.”
Domestic wire rod is discussed delivered to customer $0.25/cwt less this week at $37.50-$38.00/cwt. ($750-760/nt or $827-838/mt), though trading remained limited.
Most contacts polled about the recent August scrap settle said recent bad US economic data on interest rates and jobs, combined with recent stock market losses overshadowed recent calls for higher August scrap. Some pointed to a global economic downturn that is affecting US commodity prices. Some added that an excess of steel billet in the world is reducing the need for ferrous scrap. As global markets remain off, they said, there’s a lot more billet available to force scrap lower.
In the US Midwest, August busheling scrap is steady to July at $355-375/gt ($361-$381/mt) delivered to mill, while shredded scrap is steady to July at $370-380/gt ($375-385/mt) delivered to mill. HMS#1 and P&S scrap are steady to July at $320/gt ($325/mt) and $345-355/gt ($351-361/mt) delivered to mill, respectively, scrap insiders told SteelOrbis.
“On August scrap, I’m hearing sideways from several dealers,” another rebar insider told SteelOrbis. “The call for $10-$20/gt up has not been received well from the mills, but rather we’re seeing resistance.”