Thursday, 13 February 2025 00:54:38 (GMT+3) San Diego
US import rebar and wire rod prices were unchanged this week following a February 10 announcement by the Trump administration to re-institute new far-reaching Section 232 tariffs of 25 percent on all steel and aluminum imports from countries seeking export into the US.
The new Section 232 tariffs come in response to what the administration believes are unfair trading practices and a global excess of steel capacity, which continues to harm the competitiveness of the US steel industry.
The measures will apply to imports from Canada, Brazil, Mexico, South Korea, as well as other countries that had been entering the US duty free under previous Biden carve outs.
Long steel market experts told SteelOrbis that tensions with the US two largest trading partners Canada and Mexico remains high, as it remains unclear whether earlier announced 25 percent blanket tariffs on all incoming product imports from Canada and Mexico -that were later delayed by 30 days- would be added to the newly instituted Section 232 tariffs.
"My Canadian clients are all freaked out over the uncertainty over the new tariffs," said one import rebar market insider, "because it could have real consequences on the market if the tariffs are doubled, meaning a 50 percent tariff for Canada."
Media reports indicate a potential combined 50 percent tariff on Canada could go into effect on March 12, stoking concerns with the US largest trading partner, though no further information on potential "stacking of tariffs was available for Mexico as of press time.
In the imported rebar markets, pricing was steady from a week ago on reduced demand as uncertainty remains over import tariffs. Offers from Egypt are reported flat on a delivered-to-customer basis at $35.00-36.00/cwt. (700-720/nt or $772-794/mt), off from an average $36.50/cwt ($730/nt or $805/mt) two weeks earlier. Offers from Vietnam for May delivery are last discussed at $33.00/cwt. ($660/nt or $728/nt) delivered, while offers from Mexico on a Houston loaded truck basis remain "off the table" following the tariffs announcements. At last report Mexican pricing was discussed at $37.00-38.00/cwt. ($740-760/nt or $816-838/mt), following last week's announced 30-day delays of the earlier trade tariffs.
Import rebar on a loaded truck basis at the US Gulf and US East Coast is discussed flat at $35.00-36.00/cwt. ($700-720/nt or $772-794/mt), unchanged from a week earlier.
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 continued uncertainty regarding the planned restart of the Liberty Steel wire rod plant in March.
Long steel market insiders said they expect domestic mills to increase wire rod prices as early as next week on continued limited supply with several recent plant outages, and following increases this week in domestic rebar pricing by Nucor
US domestic rebar rises while wire rod stays flat, as Trump announces 25% tariffs on steel and aluminum
Thursday, 13 February 2025 00:43:57 (GMT+3) San Diego
US domestic rebar prices increased while wire rod was reported flat this week as President Trump initiated 25 percent across the board Section 232 tariffs on steel and aluminum from overseas suppliers on February 10.
"It will take a while before the full and realistic impact will emerge," said one SteelOrbis insider, discussing the 25 percent tariffs. Most insiders said steel prices will go up because of reduced steel imports. The true impact of the tariffs should be unveiled over the next few months, they said.
In the weekly rebar spot markets, domestic supply on an FOB mill basis is assessed with most transactions noted at $38.00-39.50/cwt ($760-790/nt or $838-871/mt), on average $38.75/cwt ($775/nt or $854/mt), up from seven days ago.
On the mill side, on February 10, steelmaker Nucor announced a $40/nt ($43/mt) or $2.00/cwt., increase in rebar pricing across all of its producing mills, though the full price increase has yet to be accepted by the market, rebar insiders told SteelOrbis. Nucor said the increase was inspired by a "significant rise in input costs." Insiders said they were expecting the rising cost of February scrap to cause mills to raise prices.
Shredded scrap in the US Ohio Valley rose an average $35/gt ($36/mt) to $430-435/gt ($436-441/mt) on low inventory at both mills and suppliers after recent extreme cold weather and transportation-related problems complicated the delivery of monthly contract scrap. At the beginning of February negotiations, several mills reported still being owed significant amounts of January scrap.
In the domestic wire rod market, most transactions were reported this week at $40.00-42.00/cwt. ($800-840/nt or $882-926/mt), or an average of $41.00/cwt. ($820/nt or $904/mt), unchanged from seven days ago.
Tensions in the weekly steel spot market is likely to remain high as President Trump is expected to announce an additional set of reciprocal tariffs later this week.
March scrap seen sideways to higher on low inventories, tariffs could further pressure scrap supply
Friday, 14 February 2025 00:34:35 (GMT+3) San Diego
March ferrous scrap pricing is expected to settle sideways to higher than recent February settles next month, as inventories are expected to remain low at both mills and suppliers, while new tariff announcements from the Trump administration could further reduce imports of steel and steel scrap at a time when domestic steel production is likely to increase, insiders told SteelOrbis this week.
Market insiders told SteelOrbis expectations for lower tariff-inspired steel imports could cause domestic mills to boost production, which will require more scrap. After Trump's 2018 Section 232 import tariff announcements, domestic mills increased capacity utilization from about 75 percent in March of that year to about 80 percent in September. US capacity utilization averaged about 75.8 percent in 2024, with December estimated at 77.6 percent.
Scrap data from the International Trade Administration (ITA) indicates total imports of steel scrap from abroad was 5.77 million metric tons for all of 2023, with Canada and Mexico, the US' two largest trading partners, accounting for more than 4.9 million mt, or nearly 84.5 percent of the global total. ITA data for 2024 shows yearly global scrap imports off 6.3 percent to 5.41 million mt, with Canada and Mexico accounting for nearly 4.9 million metric tons, or about 90.1 percent of the 2024 total In 2024, US scrap consumption is estimated at 51.5 million mt, so imports accounted for nearly 10.5 percent of US scrap consumption.
In 2024, ITA data showed the US exported 16.9 million mt of scrap abroad, so US scrap exports would need to decline by about 32 percent to make up the scrap import shortfall.
Trump's reinstatement of Section 232 tariffs this week calls for a 25 percent import tariffs on Canadian and Mexican steel and scrap, beginning in March. Its expected that most countries will respond in kind with reciprocal tariffs of their own.
"We're expecting to see a significant increase in capacity utilization on the part of domestic mills because of tariffs, though the increase could be faster this go-round because of consolidation in the US steel industry since (2018)," one steel market insider told SteelOrbis.
A mill contact confirmed that the outlook seems bullish thus far for March scrap.
"I think expectations are for pricing not to be down, and that there's a good chance that prices could go up again, though not to the same extent that we saw for February. the mill contact told SteelOrbis.
One Mexican steel insider was more specific about price levels, though he cautioned that it was still early in discussions about March scrap.
"I think scrap might be stable to $20-30/gt ($22-32/mt) higher [on a delivered basis] for March," he said, "though, it may depend largely on how the tariff situation unfolds, so we're not completely sure at this point."
One Midwest scrap supplier said the effect of tariffs could cause a spike in local busheling values, which were $40-50/gt ($43-53/mt) higher delivered to customer than was seen for January. Busheling scrap in the vicinity of Chicago settled at $445-480/gt ($461-486/mt), market insiders told SteelOrbis
"I'm hearing similar chatter about March scrap being sideways to higher," he said, "though I'm also hearing we could end up seeing busheling scrap in the $700/gt range ($772/mt) [delivered to customer] come April."
Based on a sideways to higher expectation for March scrap versus February scrap settles, March busheling scrap in the Ohio Valley could settle at or above $445-480/gt ($461-486/mt) delivered to customer, while shredded scrap could close at or above the $430-435/gt ($436-441/mt) February settle, delivered. March HMS 1 could settle at or above $375-390/gt ($381-396/mt) delivered price, while March P&S is likely at or above the February settle of $421-431/gt ($427-438/mt) on a delivered to customer basis.
On the US East Coast, a sideways to higher early March scrap estimate would put busheling scrap at or above the recent $410-430/gt ($417-437/mt) February settle on a delivered basis, while shredded scrap is seen at or above the February $385-395/gt ($391-401/mt) delivered to customer settle. March HMS1 is seen at or above the February settle at $355-370/gt ($361-376/mt) delivered, while P&S could settle at or above $355-365/gt ($361-371/mt) on a delivered to customer basis.
