US import rebar and wire rod markets were steady again this week as domestic steel mills continue to discount pricing to match the price of delivered imports, market insiders told SteelOrbis this week. Long steel price increases also were thwarted by more reports of lower priced Asian billets, often used as a substitute for US scrap, which settled sideways on the US East Coast and sideways to lower in the US Midwest for September.
Long steel traders use the price of scrap as a gauge to determine the likelihood that long steel prices are likely to rise or fall.
“While there’s not a lot coming in, US mills are matching the price of incoming imports by discounting, especially on large transactions,” said one East Coast import rebar dealer. “With prices continuing to decline, no one is feeling a need to do futures right now, as there’s plenty of supply right now available on the ground.”
Import rebar is currently priced on a loaded truck US Gulf Coast basis at $35.25/cwt. ($705/nt or $777/mt), unchanged from seven days ago, when import prices were steady, even as an increased amount of reports of importer discounts were reported to SteelOrbis. Gulf Coast rebar declined from $36.50/cwt ($730/nt or $805/mt) during the week of August 19, amid increasing reports of mill discounting programs as a growing expectation for lower September scrap settles dominated the spot market, insiders said.
US Gulf Coast market contacts are less concerned that a likely October 1 strike by membership from the International Longshoreman’s Association (ILA) will have much effect on imports at Texas-based ports.
“There’s not that much bar coming in right now, and many Texas-based non-union ports won’t be affected by the strike,” said one Gulf Coast rebar importer. “The most likely areas to be affected are the Northeast and the West Coast, where much of the trade will be diverted.”
Mexican rebar vicinity Houston on a loaded truck basis, remains steady at $36.25-$37.50/cwt. ($725-750/nt or $799-827/mt). Market insiders said Mexican rebar remains non-competitive with domestic supplies as concerns over antidumping from Mexico limit price discounting actions from Mexican mills. Mexican contacts are optimistic that an expected decline in interest rates by the Federal Reserve starting in September will help revive demand for Mexican steel.
Market insiders said recently that domestic mill discounting continues to limit rebar orders from Algeria and Egypt, which are “struggling to find customers even at $35.00-35.50/cwt. ($700-710/nt or $772-783/mt),” said one import rebar market insider. “Domestic mills are so competitive on pricing that importers have been forced to cut their prices to find any market share at all,” he said.
In the imported wire rod market, prices remained steady on the week at $35.50-$37.00/cwt. ($710/nt -$$740/nt or $783-816/mt), though trading remains muted as domestic producer discounts continue to limit the room for importers to gain market share, market insiders told SteellOrbis.