US domestic rebar and wire rod markets were steady to up this week as expected higher October scrap prices begin to trickle down into finished steel markets, and as reductions in domestic wire rod production continues as a major US supplier was expected to continue to reduce output through the end of October, market insiders told SteelOrbis this week.
The weekly assessment differs from that seen during the week of September 30, when Asian finished steel and scrap markets turned sharply higher as a result of stimulus actions taken by the Chinese government. Market insiders said overseas price spikes could “spill over” into US markets, though their affects would largely depend on whether optimistic Asian market sentiment continued when markets resumed trading following the Golden Week holiday on October 8.
And while import long steel pricing did indeed finish the week steady to slightly higher on continued price increases in global steel markets, market insiders caution that as domestic long steel imports continue to slip, it may be difficult to sustain recent price increases unless domestic market fundamentals improve in the weeks ahead.
“I think if the price of scrap moves up like the way it looks, I think prices (for long steel) will move up as well,” said one Gulf Coast-based long steel market insider.
In the weekly spot markets, domestic rebar on an FOB mill basis is assessed in a tighter trading range this week, with most transactions discussed at $36.50-$37.00/cwt. ($730-740/nt or $805-816/mt), although on average, unchanged from last week’s $35.00-38.00/cwt. ($700-770/nt or $772-849/mt) range. New spot activity remains limited, with a noted lack of aggressive mill discounting programs still observed, thus we have observed higher low prices and lower high prices in weekly trading ranges.
In the domestic wire rod markets, reduced output from Liberty Steel’s 700,000-ton annual capacity wire and rod plant in Peoria, Illinois, continues to cause a slight regional supply shortfalls, insiders said, though demand remains limited. Spot transactions are talked about $0.75/cwt. ($15/nt or $16.53/mt) higher at an average $37.00/cwt. ($740/nt or $815/mt), up from $36.00-36.50/cwt. ($720-730/nt or $794-805/mt) seven days ago.
Insiders tell SteelOrbis that the recent price strength seen in wire rod markets may not extend through October because of the narrowing window to complete ongoing construction projects as winter sets in in many areas in the Northeast and upper Midwest.
While October scrap was still trading at the time of publication, October scrap market pricing is observed at $20/gt premiums to September settles across most Southeast scrap grades. On the US East Coast, October 80:20 HMS#1 scrap is discussed at $350/gt, up from an average of $303/gt in September. Scrap traders said higher export demand since the port strike was averted until January 2025, and dwindling yard inventories was causing East Coast scrap prices to rise more than those seen in other inland regions.
“I think everyone’s expecting a little higher on scrap for October, so the Turkish mills are raising their prices on long products. It also gives them more room to raise prices on scrap,” the market insider added.
Midwest scrap pricing remains more difficult to assess, insiders said.
“I’ve heard no prices,” said one Midwest scrap insider on October 10. “It sounds like the market is very regional this month, though we heard that mills were out buying at sideways.” The contact later added that mills in the Cleveland, Ohio area had purchased for October at plus $20/gt. Cleveland Cliffs has several mills in the area, with reports confirmed that it was buying at plus $20/gt early in the buy cycle on October 7.
Insiders said although scrap pricing was steady to higher, spillover into finished steel markets remains minimal thus far.
“We’re only seeing a minimal amount of increases from higher scrap so far in the weekly finished steel markets,” the insider said.