US import rebar and wire rod prices were mostly steady to a bit lower this week as flat August scrap prices failed to generate a much-anticipated price recovery in domestic long steel markets, market insiders told SteelOrbis this week. August scrap, which was earlier expected to settle sideways to higher, settled sideways to July pricing, as scant new demand prompted few mills to pay more for their August scrap requirements.
Insiders said bad economic reports on US interest rates, inflation statistics, jobs, and the recent stock market declines overshadowed earlier calls for $10-$20/gt ($10-$20/mt) gains in August scrap. They added that with scrap now forecast to potentially decline in September, market focus is shifting to more concrete fundamentals versus recent somewhat vague market expectations.
“Some customers are expecting that the (long steel) market might improve once the US government announces a drop in interest rates to activate the economy no later than September,” said one import rebar dealer commenting on limited construction-related activity in the rebar markets. “If not, they do not expect a good rest of the year, and prices might drop more due to slower demand.”
“It should be an interesting couple of months as it seems the markets are now waiting on the US presidential election or a significant (Federal Reserve) rate cut to improve finished steel prices,” said another US East Coast rebar dealer. “Foreign billet is also said to be taking the place of US scrap. There is so much billet available overseas, that nobody needs scrap.”
In the import rebar markets, US East Coast loaded truck basis rebar was steady at $36.50/cwt. ($805/mt or $730/nt), while US Gulf Coast loaded truck rebar was also reported unchanged at $36.50/cwt. ($805/mt or $730/nt), market insiders said. Of note in the imported rebar market was a reported sale of 20,000 tons from Bulgaria discussed at $710/mt CNF or $35.50/cwt., $0.50/cwt. ($10/nt or $11/mt) less than a week ago.
As US demand continues to flounder, market insiders said imports from Egypt slipped another $0.50/cwt. ($10/nt of $11/mt) to $36.50/cwt. ($805/mt or $730/nt) delivered US port, matching price offers from Oman and UAE which remained steady at $36.50/cwt.
In the imported wire rod markets, wire rod mesh DDP loaded truck USG was quoted flat once again at $36.50-$38.00/cwt. ($805-838/mt or $730-760/nt), while wire rod mesh CFR FO USG was steady at $39.00/cwt. ($860/mt or $780/nt).
Imported rebar from Mexico on a loaded truck Houston basis is last discussed steady at $37.00/cwt. ($816/mt or $740/nt), market insiders said, while North African rebar from Algeria on a delivered truck basis was unchanged for an eighth week at $36.50/cwt. ($805/mt or $730/nt).
Financial markets expect the Fed to cut interest rates by a quarter of a percentage point at its September 17-18 meeting, which would mark the first such move since the central bank began raising its benchmark overnight lending rate in March of 2022, pushing it from the near-zero level to the current 5.25 percent to 5.50 percent range, a level it has maintained since July 2023.
Domestically, reports persist that mills continue to cut pricing to maintain market share versus imports. “I don’t think that it is imports causing prices to fall, as much as infighting between mills chasing tonnage,” they said recently.
On the domestic rebar front, spot prices declined $2.00/cwt. ($40/nt or $44/mt) this week to $34.50-$35.50/cwt. ($690-710/nt or $761-783/mt) from previous levels at $37.50/cwt. ($750/nt or $827/mt) on reports of more mill discounts, abundant supply and continued unremarkable demand from the construction sector as US interest rates remain near record highs. Wire rod declined $0.25/cwt. ($5/nt or $6/mt) to $37.50-$38.00/cwt. ($827-838/mt or $750-760/nt from earlier assessments at 38.00/cwt. ($838/mt or $760/nt).
According to the US Census Bureau, total construction spending during June 2024 was estimated at a seasonally adjusted annual rate of $2,148 billion, 0.3 percent below the revised May figures, though up 6.2 percent from the same time in 2023.