US import rebar and wire rod pricing was mixed this week as demand continues to falter, even as domestic supply is expected to remain constrained with a key wire, wire rod and rebar production plant now confirmed to remain offline for the next several months. Insiders say the Liberty Steel outage has allowed US suppliers more liberty to raise their prices, even as few mills have yet to implement those price increases because of continued competition from their competitors.
Recent reports indicate that Liberty Steel will shut its wire and wire rod mill at its Peoria, Illinois plant on December 6, furloughing more than 260 employees at the wire rod mill, as well as another 280 workers at the wire mill, “Due to financial troubles the company is facing,” said Penny Wright, president of the Independent Steel Workers' Alliance, the union that represents the furloughed workers, in a report published in a December 2 local newspaper report.
“After evaluating the current steel market challenges, including the influx of lower-priced imports, we have made the difficult decision to idle the Peoria Mill temporarily from December 6,” Wright said. “The wire mill staff will be retained on furlough during this period, and the organization plans to restart as the market improves, with a projected restart date of early February.”
While this week’s report from the union president confirms many details previously reported by SteelOrbis through market contact channels, uncertainty remains high whether the unit will restart anytime soon.
“A lot of people are speculating that the Liberty plant will never come back online because of the parent company’s continued financial troubles,” a long steel market insider remarked to SteelOrbis. “This situation with Liberty is causing a local shortage of wire rod and rebar which is causing import prices to begin to climb. Who knows, maybe President Trump (next year) can throw them a lifeline.”
This week’s market assessment differs from that reported during the week of November 23, when prices on the week were mostly lower overall following an earlier weekly price bump as insiders purchased supply ahead of the November 28 Thanksgiving Day holiday. And, while domestic and import rebar and wire rod pricing thus far in the fourth quarter remains in a fairly narrow and limited range, competition from US domestic mills for market share versus imports is expected to remain spirited, market insiders said.
“Overall, people are starting to get more interested in purchasing imports going into the first quarter,” the long steel insider said. “Prices are trending up, and while current demand still remains kind of soft, domestic mills are expected to begin raising prices later in December.”
In the weekly import markets, US East Coast rebar on a loaded truck basis is discussed at $36.50-37.50/cwt. ($730-750/nt or $805-827/mt), up from $36.00-36.50/cwt. ($720-730/nt or $795-805/mt) seven days earlier. US Gulf Coast rebar on a loaded truck basis was steady on the week at $35.75-36.75 cwt. ($715-735/nt or $788-810/mt), insiders said.
Imported wire rod mesh on a DDP loaded truck basis US Gulf is discussed stable following earlier weekly declines at $37.00/cwt. ($740/nt or $827/mt), while import wire rod last traded at $36.50-37.50 cwt. ($730-750/nt or $805-827/mt), off slightly from $37.00-$38.00/cwt. ($740-760/nt or $816-838/mt) reported one week ago. Competition from aggressive domestic suppliers continues to limit new spot import transactions, insiders said.
Despite a continued domestic wire rod shortfall, some importers say domestic long steel supply still remains a more attractive option versus imports due to a continuation of aggressive domestic mill discounting programs, shorter lead times for local delivery, and reduced geopolitical risk. They add that, owing to low domestic finished steel demand, recent price increase announcements from steel producers CMC and Nucor as well as more recent price increases from several Canadian mills, have could continue to have a limited impact on rebar and wire rod values in weekly spot markets.
Import rebar pricing offers from Egypt were reported less again on the week following earlier slight increases, with most new offers noted on a delivered to customer basis at $35.75/cwt. ($715/nt or $788/mt) off from $36.50/cwt. ($730/nt or $805/mt) one week ago.
Delivered rebar from Mexico vicinity Houston, Texas, on a loaded truck basis is discussed slightly lower again on the week at $35.75-37.75 cwt. ($715-755/nt or $788-832/mt), off from $36.00-$38.00/cwt. ($720-760/nt or $794-838/mt) a week earlier. Import insiders remain hopeful that pricing from Mexico could move slightly higher in the near term as a result of improved market sentiment following the US presidential election and the addition of more tariffs on imported steel.
“Overseas supply remains limited, while competition among domestic suppliers has made pricing challenging for imports,” reports one Mexican long steel insider. “Things could be changing soon, as scrap for December is trending sideways, while the outlook for January is sideways to higher.”