US domestic rebar and wire rod markets were mixed this week, with market insiders polled by SteelOrbis saying a price bottom could be at hand because of a sideways to higher outlook developing for August scrap prices.
The weekly SteelOrbis long steel market assessment is somewhat different from the week of July 15 when pricing was reported steady to down in continued thin trade amid scant new construction-related demand and flat to lower July scrap prices.
The difference this week is a growing consensus among market insiders that August scrap pricing will be sideways for busheling and potentially higher for cut grades. Higher August scrap pricing some say, is likely as dealer inventories are reported down between 20-50 percent in the Midwest and US East Coast.
One wildcard, market insiders note is what affect a potential October 1 strike by the International Longshoreman's Association dock workers could have on US scrap inventories if US East Coast and Gulf Coast ports are idled and US scrap cannot move to higher-demand foreign export markets.
“The market expectation for August scrap is sideways to up $10/a ton,” said one Mexico-based rebar insider. “So, maybe US scrap is at the bottom.”
Although a higher August scrap outlook is likely to prevent further large-scale price declines, market insiders say some regional rebar markets could see prices slip a bit more as construction-related demand remains low across the US with high interest rates, burgeoning inflation statistics and the growing uncertainty of a looming November US presidential election.
“In some areas like the US Midwest, the market remains muted and slow,” the rebar insider said “The West is not as optimistic on pricing as before, as is now trending down.”
“We are hearing of a possible August scrap price increase, but we’re not real sure what it will do,” said another East Coast rebar dealer. “If scrap goes up, it might put a bottom on things, but we don’t expect a price increase,” he said, lamenting on continued depressed long steel prices. “There’s just not enough demand to make (prices increase), and the political unrest in the US just got worse.”
Following a slight decrease the week of July 15, US domestic rebar is discussed steady to slightly higher at $36.00-$38.00/cwt. FOB mill, ($720-760/nt or $794-838/mt).
In the domestic wire rod market, prices remain flat to last week at $38.50/cwt., ($849/mt or $770/nt) FOB mill, market insiders said.
US Gulf Coast loaded truck rebar is discussed steady at $36.50/cwt., ($805/mt or $730/nt), rebar traders said. US East Coast rebar was unchanged at $37/cwt., ($816/mt or $740/nt).
Some rebar insiders caution that a potential price bottom for the long steel markets could depend on whether mills decide to purchase more scrap during the August buy cycle. Mill inventories, they say, will determine whether the August outlook for higher scrap continues in the coming weeks.