Rampant speculations about the tariffs to come

Updates From This Week

All eyes and ears on the date of February 1st

World of Concrete kicked off exactly the same day Donald Trump was inaugurated and naturally all discussions were consumed with the topic of tariffs, and when and who might get them.

StaalX CEO Murat Askin moderated the panel discussion at the SteelOrbis Rebar Wire Rod conference and a couple of takeaways from the panel was that no new spending was planned for infrastructure — in fact Trump administration stopped all the funding to the approved project pending further review. Concrete reinforcing industry group, CRSI, members were quite worried about these developments since fabricators relied on these mega infrastructure projects.

Also, the housing market is not showing any signs of life despite the dire need for 4 million new homes in the US and rising house prices.

Tariffs for Canada and Mexico were generally more impactful for the steel market as they could very quickly change the steel supply situation in the US. The main Mexican long products producer suspended their sales until Feb 1 to see the results of Trump's tariffs. Canadian mills are still in the market, however, they are asking the US consumers to take on the additional tariff that comes about.

Today, wire rod base prices from Canada can roughly be considered $40 cwt, and if a 25% tariff is indeed implemented, the US wire drawers will pay $50 cwt for those rods that are shipped after February 1st. This is a big increase to digest but with Liberty and Nucor Connecticut not producing, buyers may not have any other options, at least not immediately.

Overseas offers are more attractive but there is also no guarantee that new tariffs will not be applied to Q2 arrivals from any origin. For importers, those are even more risky to handle because many things can change during the course of the ocean voyage. New and unexpected tariffs may have devastating consequences on the importers.

The companies who will be paying higher tariffs and prices are all US companies. Foreign mills are pretty much selling at around the same prices with or without the new tariffs. There is no question about who pays for these tariffs in the end. US consumers do.

New tariffs will of course benefit US steel mills but perhaps temporarily so. Raising raw materials costs will chip away from the competitiveness of the US steel consuming industries and eventually shrink steel producers' customer base.

World of Concrete and SteelOrbis Conference Concluded

Last week, our team attended the two events in Vegas, where our CEO, Murat Askin, was a moderator at the Annual Rebar & Wire Rod conference. Stay tuned in our LinkedIn page for updates on our company, future conferences, and the steel market.

StaalX attends Tampa Steel Conference & More on February

Next week, StaalX begins a busy month of conferences, starting over at Tampa for the Annual Steel Conference (February 2-4), followed by The Precast Show in Indianapolis (February 5-6), NASPD Annual Convention in San Antonio (February 19-22), and AWPA 2025 Annual Convention over at Tucson (Feb 24-26). Stay tuned in our LinkedIn page for more updates and information!

From our content partner, SteelOrbis

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US domestic rebar and wire rod pricing steady to a bit higher as cold envelopes much of the US | Wednesday, 22 January 2025 23:58:58 (GMT+3), San Diego

US domestic rebar and wire rod pricing was reported steady to a bit higher this week as winter storms continue to sweep through the country, reducing the availability of spot supply, market insiders told SteelOrbis this week.

"Prices are mostly steady and there is little movement due to this weather," one long steel market insider said. Cold and snow was reported as far south as Houston, Texas, the first time this has occurred in four years.

In the weekly rebar spot markets, domestic supply on an FOB mill basis is assessed with most transactions noted at $37.00-38.00/cwt. ($740-760/nt or $816-838/mt), on average $37.50/cwt. ($750/nt or $827/mt), up $0.25/cwt. from seven days ago.

Market insiders caution that if harsh cold weather continues across much of the US, there is a likelihood of a long steel price increase, especially if the outlook for February scrap continues to rise. At last report, February scrap in the Midwest on a delivered to customer basis is discussed $20/gt ($22/mt) higher. During the January buy cycle, Midwest shredded scrap settled $20/gt higher than December levels to $395-406/gt ($401-406/mt), on continued reports of scant supply at collection points and cold snowy weather across much of the Midwest, which complicated shipments to customers.

In the domestic wire rod market, most transactions were reported this week steady at $39.00-41.00/cwt. ($780-820/nt or $860-904/mt), or an average of $39.50/cwt ($800/nt or $882/mt).

Market insiders claim very little pressure on domestic long steel pricing from importers, many of whom remain sidelined waiting for news any day of additional tariffs on imports from the Trump administration. At Monday's SteelOrbis RWR conference in Las Vegas, importers said many remain hesitant to book new cargoes for fear that incoming deliveries from abroad could be hit with unforeseen new tariffs at any time.

Short of new US tariffs on steel imports from the Trump administration, the major concern in the market remains the US weather's effect on steel delivery and scrap operations, especially given continued plant outages around the US, namely the Liberty steel plant in Illinois as well as the Nucor-Connecticut plant.

"With the severity of the winter conditions, a scrap shortage and subsequent price hike is usually the next step," another SteelOrbis insider cautioned.

US import rebar and wire rod markets stable as likely tariffs make importers leery to book cargoes | Thursday, 23 January 2025 21:38:56 (GMT+3), San Diego

US import rebar and wire rod pricing was steady this week as many long steel importers remain leery about importing additional cargoes given the likelihood that the incoming Trump administration will impose additional tariffs on imported steel, market insiders told SteelOrbis this week.

At the SteelOrbis RWR long steel conference in Las Vegas this week, several importers said they were hesitant to book more supply from overseas because additional tariffs on imported steel could be announced "at any moment." Several told stories of being assessed additional unforeseen fees on incoming cargoes in the past as tariffs were enacted. Most conference attendees said they think additional tariffs on imported steel are a near certainty.

"We think more tariffs on steel imports are a given," said one market insider. "Why else would Trump have created an External Revenue Service to pay for the extension of tax cuts. Importers have been burned pretty bad in the past, so that's a good reason why imports are way off."

Even as import pricing is reported flat this week, domestic long steel pricing is mostly higher as record cold weather and snow combined with recent wire rod supply reductions at Liberty. Steel and Nucor-Connecticut. Domestic rebar pricing was reported higher on increased January Midwest scrap prices, with February scrap seen another $20/ton ($22/mt) higher.

In the import markets, pricing remains steady with last reported sales from Egypt on a delivered-to-customer basis at $36.50/cwt. ($730/nt or $805/mt). Insiders expect import pricing from Egypt to remain in the $36.50-37.00/cwt., range near term, with additional cargo bookings from Malaysia and Vietnam likely to keep prices from moving much higher.

On the US Gulf Coast, imported rebar remains at $35.75-36.75 cwt. ($715-735/nt or $788-810/mt) on a loaded truck basis, unchanged from earlier assessments, insiders said. Following earlier declines, rebar on an East Coast loaded truck basis is assessed steady at $35.75-36.75/cwt. ($715-735/nt or $788-810/mt).

In the Mexican export markets, insider say buyers remain hesitant to engage with sellers as a result of tariff uncertainty. Houston loaded truck rebar is offered steady at $37.50-$39.50/cwt. ($750-790/nt or $827-871/mt), though no new trades are noted, following recent $30-50/ton rebar price increases from US mills.

On the import wire rod mesh front, import material on a DDP loaded truck basis USG is discussed flat at $37.00/cwt. ($740/nt or $816/mt), following earlier price strength as US markets moved higher amid uncertainty regarding the planned restart of the Liberty Steel wire rod plant in March 2025.

February US scrap pricing seen higher on tight supply as cold weather, snow, reduces in-flows | Thursday, 23 January 2025 17:48:19 (GMT+3), San Diego

Ferrous scrap prices for the month of February in the US Midwest are now seen settling at least $20/gt ($22/mt) higher in most areas east of the Mississippi River, as cold weather and snow further reduces in-flows into collection facilities, market insiders told SteelOrbis this week.

Dangerous cold weather combined with snowfall as far south as Houston, Tx., and New Orleans, La., has complicated the movement of scrap to collection points, many of which have continued to report low inventories since late in the 4th quarter, as low prices paid to peddlers combined with early winter weather to reduce inventory.

"Right now, yards are trying to get equipment running and process what little scrap they have in inventory," said one Midwest scrap insider. "Flows into facilities are terrible, weather remains brutal, and yards are operating on limited hours. The talk in Houston was that markets would be up at least $20/gt for February."

In the Midwest, problems with the transportation of scrap are not limited to weather-related delays to truck deliveries, as barge transportation of scrap and other products on the Illinois River will be shut down through March as the US Army Corps of Engineers completes work on docks. River closures and restricted movements are reported also on barge movements in Ohio, Tennessee and Kentucky, according to reports from American Commercial Barge Line.

The combination of weather-related transportation issues and low scrap supply at scrap collection points helped to drive higher January scrap values, even as demand for finished steel products remained muted. During the January buy cycle, Midwest and Southeast scrap prices settled $20/gt ($22/mt) higher than their December counterparts, while pricing on the US East Coast was reported sideways to December values on less spirited export scrap demand requirements.

"We're not hearing all that much in the markets this week, but I have to believe with extremely tight scrap supplies, prices will be up more than $20/gt in February," said another scrap market insider.

Based on a minimum $20/gt increase for February scrap Ohio Valley HMS 1 could settle at $360-380/gt ($366-386/mt) delivered to customer, while shredded scrap could settle at $415-420/gt ($422-427/mt) on a delivered basis. P&S is likely to settle at $405-$415/gt ($411-422/mt) delivered to customer, while prime busheling scrap could settle at $430-455/gt ($437-462/mt) delivered to customer.

No clear direction is yet forthcoming for the US East Coast for February, therefore it will be assessed sideways for now to January pricing, pending additional data. Insiders said depending on export demand, price hikes in the region also are likely as more supply gets diverted to higher priced Midwest markets. East Coast February HMS is last seen near $335-350/gt ($340-356/mt) delivered to customer, while shredded is likely near to $365-375/gt ($371-381/mt) delivered. P&S is seen at $335-345/gt ($340-351/mt) on a delivered basis based on a sideways expectation, while prime busheling scrap is likely to settle at $390-410/gt ($396-417/mt) on a delivered to customer basis.

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