US import rebar and wire rod markets were unchanged this week in limited new trade as markets remain well supplied given current low demand for construction-related structural steel, market insiders told SteelOrbis this week.
Little news of new mill discounting programs was also noted in day to day spot markets, indicating that a potential price bottom near current $34.75-35.25/cwt import price levels ($695-705/nt or $766-777/mt) may have been reached, market insiders said.
Lower priced scrap also was putting downward pressure on US long steel markets. In the US Midwest, September scrap pricing for most grades settled sideways to August, while shredded scrap was down $20/nt ($20.30/mt) to $350-360/nt ($356-366/mt). October scrap at last report is mixed with some contacts expecting weak sideways if an Oct. 1 dockworker strike occurs and US East Coast exports are cut, while others expect strong sideways to September if the strike is averted and mills emerge stronger for October supply given fewer outages at their operating mills versus September amid continued reports of tight supplies.
“We haven’t seen a change in import pricing versus last week,” said one US Gulf Coast rebar market watcher. “We’re hearing reports of sub-$35.00/cwt bids out there, but its mostly low ballers out there fishing for orders.”
Contacts said current long steel demand remains limited even though a recent stimulus packages in China and a Sept. 18 Federal Reserve US interest rate cut could improve construction-related demand longer term.
“Buyers are taking a wait and see attitude regarding new purchases,” he said. “Demand is not really there yet, and people are trying to see if the new China stimulus sticks.”
Recently, the People’s Bank of China announced that the Reserve Requirement Ratio (RRR) would be reduced a half point.
On the US East Coast, import rebar on a loaded truck basis is reported steady at $35.25/cwt., with its Gulf Coast equivalent steady as well at $35.25/cwt. ($705/nt or $777/mt).
Imports from Egypt are last discussed unchanged from seven days ago at $35.00/cwt, ($700/nt or $772/mt), while quotes from Turkey and Bulgaria were also flat at $35.25/cwt. and $35.00/cwt., respectively.
In the wire rod markets, imported product is discussed steady in thin trade at $35.50-37.00/cwt ($710-740/nt or $783-816/mt).
Market insiders say US East Coast exports of containerized steel scrap, a key indicator of long steel pricing, might be trimmed starting in October as less than a week remains for members of the International Longshoreman’s Association (ILA) to reach an agreement with the United States Maritime Alliance to avert an expected Oct. 1 strike at US East Coast and Gulf Coast ports. While the groups remain at an impasse over wages and automation issues, a strike could affect nearly 43 percent of all containerized imports and exports, that come into and move out of the US.
Maritime experts estimate each day the strike continues will back up supply between 4-6 days, with a daily bill for lost products and services amounting to about US $5 billion, according to an analyst at JP Morgan.
Recent conversations regarding the strike with SteelOrbis contacts indicates limited concern given that demand for US scrap remains tepid overseas with the use of cheap billet as a scrap alternative continuing.
“We haven't really seen much change lately in rebar pricing,” said another Gulf Coast rebar insider. “The dockworker's strike affect in the US Gulf will be very minimal as those labor disputes tend to get settled within a week or so.”
SteelOrbis shipping contacts also report minimal concern from their customers over the potential impact of a strike.
“We do have bookings off the East Coast for October, but if a strike occurs they'll have to wait,” she said. “They won't be able to bring in containers, and would be able to re-route or wait it out. “
Another contact reported recently that imports remain limited at most ports because of low-priced and heavily-discounted domestic supplies available through US mills. Imports simply can't compete at current prices, they say.
“There’s not that much bar coming in right now, and many Texas-based non-union ports won’t be affected by the strike,” one Gulf Coast rebar importer told SteelOrbis recently. “The most likely areas to be affected are the Northeast and the West Coast, where much of the trade will be diverted.”