US import rebar and wire rod markets flat, with buyers sidelined awaiting Trump actions on tariffs on Feb. 1 | Thursday, 30 January 2025 22:49:53 (GMT+3), San Diego
Imported rebar and wire rod pricing was largely flat this week as buyers remained sidelined waiting on the outcome of threatened tariff actions by US President Donald Trump on Mexico and Canada on February 1, market insiders told SteelOrbis this week.
The threat of new tariffs on the US' largest trading partners caused suppliers in Mexico to temporarily withdraw from the US market. In addition to Mexico, insiders said import availability from overseas remains limited, due to uncertainty regarding tariffs as well as ongoing fierce competition from US mills for scarce domestic market share.
"We have stopped selling into the US until we have more clarity with regard to the Trump administration's decision to institute new 25 percent tariffs on Mexico and Canada on February 1," one Mexican market insider told SteelOrbis. Prior to the decision, customers in Houston were focusing on securing orders ahead of the expected tariffs, he said.
If tariffs are announced on Saturday, February 1, market insiders said additional domestic mill price increases are likely for early February. "Domestic long steel prices could increase with tariffs on Mexico and Canada, plus the price of scrap is up about $20/gt for February," the insider said. Rising domestic prices could make way for more competitive imports, insiders said.
Some market insiders said a first round of limited steel tariffs by Trump could be used as a leveraging tool to extract additional concessions on trade, fentanyl, and illegal immigration from Mexico, Canada, as well as China. Contacts cautioned that Canada might retaliate against the US with regard to important oil shipments, causing domestic gasoline prices to rise.
"Limited tariffs initially will let Trump negotiate from a position of strength," the long steel insider said. "We expect Trump to use tariffs on a limited basis first, and to basically, let the chips fall where they may," he said. "He's unlikely to use tariffs on all steel products. If they don't comply, then I expect he'll bring impose more tariffs on more steel products."
In the imported rebar markets, pricing remains steady ahead of US tariff announcements with last reported sales from Egypt reported 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 delivered to customer, near term, with additional cargo bookings from Malaysia and Vietnam at $36.00-37.00/cwt., likely to keep import prices from moving much higher.
On the US Gulf Coast, imported rebar pricing remains flat at $35.75-36.75 cwt. ($715-735/nt or $788-810/mt) on a loaded truck basis, unchanged from one week prior. East Coast loaded truck basis rebar is assessed steady at $35.75-36.75/cwt. ($715-735/nt or $788-810/mt) with trade non-existent ahead of tariff announcements.
In the Mexican export markets, prices remain fixed pending a resumption of trade, with Houston loaded truck rebar product last discussed at $37.50-$39.50/cwt. ($750-790/nt or $827-871/mt). Traders said recent $30-50/ton rebar price increases from US mills have largely been accepted by the market and are being reflected in current domestic pricing.
"Increases in domestic rebar seem to be sticking," said one rebar market insider. "On domestic wire rod, while demand remains somewhat weak, the market anticipates supply remaining tight due to Nucor-Connecticut, and Liberty closing down operations. We expect more increases in rod pricing near term as seasonality and restocking takes place," he said.
On the import wire rod mesh front, import material on a DDP loaded truck basis USG remains 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.
Longer term, it remains unclear whether actions taken by the Trump administration to re-examine infrastructure funding projects will be helpful to current rebar and wire rod pricing.
Media reports indicate senior White House officials were caught off guard January 27 when the Office of Management and Budget released a memo, ordering a pause in grants, loans and other federal financial assistance, including infrastructure programs, to ensure that "federal programs aligned with Trump policy priorities."
A day later, a federal judge in the District of Columbia temporarily blocked Trump's order in response to a lawsuit filed by Democracy Forward, a liberal organization, arguing that the directive violated the First Amendment and a law governing how executive orders are to be rolled out.
On January 29, Matthew J. Vaeth, acting director of the Office of Management and Budget, told federal agencies the memo freezing aid had been "rescinded." But the White House press secretary, Karoline Leavitt, said on social media that Trump's initial executive orders on federal funding "remain in full force."
US February scrap now seen at $20-30/gt premiums to January levels on scant supply, weather delays | Friday, 31 January 2025 18:55:45 (GMT+3), San Diego
February scrap is now expected to settle $20-30/gt ($20-30/mt) higher versus January levels as recent cold weather and storms is likely to continue to complicate the delivery of new scrap to many local collection facilities, scrap insiders told SteelOrbis this week.
With supply at many Midwest and Southeast collection facilities reported low, few think there's much possibility for February scrap prices to decline, following higher January values. Supply on the ground at mills also is reported low as well, scrap insiders said.
"I would say there's very little possibility for any downside risk," said one Midwest scrap insider. "I know that mills are hungry for scrap this month, as many have let their supplies dwindle down because of the recent cold snap."
In the Midwest, problems with overland transportation of scrap were not limited to weather-related delays to truck deliveries, as barge transportation of scrap and other products on the Illinois River is reported to be shut down through March as the US Army Corps of Engineers completes work on docks. River closures and restricted movements are reported for barge movements in Ohio, Tennessee and Kentucky, according to reports from American Commercial Barge Line.
With the beginning of the February buy cycle quickly approaching, some contacts think even higher prices are possible, especially for prime grades as well as P&S scrap.
"February scrap prices are up on cold wintry weather and reduced in-flows into collection yards," reported another Midwest scrap dealer. "It sounds as if prices will be up at least $20/gt. I'd be surprised to see $50/gt premiums as some have said, but I have heard that rumor too."
