US domestic rebar and wire rod markets remain mostly stable in continued thin trade, as domestic mills continue to discount pricing to maintain market share versus imports even as September scrap is called sideways to lower heading into the start of the September buy cycle, long steel market insiders told SteelOrbis this week.
New spot market trading remains limited, insiders say, because locking in large purchases now could be risky, especially if September scrap prices settle down from August levels. At the time of publication, September Midwest scrap is seen sideways to August values for prime busheling grades and #1 bundles, while cuts and shred grades are seen $20-$30/gt less, surveys indicate. Not much if any premium is expected for US Gulf Coast scrap grades as international export scrap markets remain sluggish, with demand generally reported down.
While new spot transactions remain limited as domestic demand remains low, insiders say current pricing is “At or close to bottom,” though few contacts surveyed expecting rebar and wire rod prices to substantially increase before the end of the year, despite a growing expectation for a one-quarter to one point interest rate cut by the Federal Reserve in September.
“It’s kind of quiet, and imports aren’t happening as domestic mills remain fairly competitive on pricing,” said one Gulf Coast market insider. “Domestic producers are discounting their rebar pricing by $1.00-$2.00/cwt. order to remain competitive with lower-priced US Gulf Coast imports at $35.50/cwt.”
Domestic rebar FOB mill basis is assessed unchanged on the week at $35.00-38.00/cwt. ($700-760/nt or $772-838/mt), with the low end of the trading range once again representing heavily discounted mill pricing for those buyers able to lock in sizable transactions.
“We’re hopeful that a rate cut by the Fed will cause some upward movement in prices,” said one Midwest rebar dealer. “The only good thing that we see now with regard to the domestic markets is that nobody’s booking for “future delivery,” he added. “They’re buying rebar that’s available on the ground. right now, so they’re picking up a few truckloads at a time, here and there.”
On the domestic wire rod front, pricing on an FOB mill basis is assessed mostly stable to the week of August 26 at $36.00-40.00/cwt. ($720-800/nt or $794-882/mt) “depending on mill,” insiders said.