US domestic rebar and wire rod pricing was flat to down slightly this week in reaction to continued low domestic demand and an outlook for July scrap that seems to indicate lower pricing. Long steel market insiders added that the combination of continued low finished steel prices and reduced construction related demand fueled by a weak US economy, are likely to keep long steel prices down in the near term.
“The US rebar market faces significant headwinds from economic uncertainties and potential supply chain issues,” one rebar market insider told SteelOrbis. “The market may experience further price adjustments in the short term, but long-term growth prospects remain strong, due to ongoing infrastructure investments.”
US domestic rebar is assessed unchanged from seven days ago at $38/cwt. ($838/mt or $760/nt) FOB mill, while domestic wire rod dropped another $0.50/cwt. ($11/mt or $10/nt) to $38.50/cwt. ($849/mt), FOB mill.
Market insiders continue to say that new trading remains muted as domestic steel mills wait on clues from the international markets to better position themselves regarding spot pricing schemes.
“Rebar imports continue not to get much traction because the pricing remains too close to the domestic prices, and no one is willing to take on the added risk associated with imports,” the rebar market insider said.
US East Coast import rebar pricing is discussed at $37/cwt. ($816/mt or $740/nt) FOB mill, versus last week’s wide range of $35-$42/cwt. ($772-$926/mt or $700-$840/nt, depending on the size of the transaction, market insiders said. US Gulf Coast loaded truck rebar for export is discussed unchanged on the week at $36.50/cwt. ($805/mt or $730/nt), rebar traders said.
This week and early next week, the July scrap market will settle before the July buy cycle ends on Tuesday, July 9. The overwhelming consensus seems to indicate pricing will be sideways to 10-20/gt ($10-$20/mt) less than June settles across most grades, with potentially less robust declines seen for the US East Coast because of solid export demand for scrap and diminished inventories at East Coast yards. Several confirmed mill cancellation orders heard in the markets seem to confirm the general outlook for lower July scrap pricing.
“With the July scrap market expected to go down, rebar prices will continue to soften,” said another rebar market insider. “In the wire rod markets, the demand is just not there,” he said, “Demand is worse than the rebar market and producers are competing to maintain cash flows. The wire rod market has been softer than rebar in the US for several years now.”