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Steel tariffs settled yet buyers are still worried
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| Tariff situation for the steel products seems to be stable with every country now included in Section 232 tariffs at 25%. Moreover, there are no exceptions or exclusions and even Canada and Mexico are expected to stay within this tariff for the foreseeable future.
This should tighten up the supply situation and raise the prices, right? Yes and no. For some products prices rose dramatically. For hot rolled coils, the market tightened from very low $30's cwt to high 40's in just a few months. Wire rod too followed a similar price curve to reach high 40's and even for some captive domestic buyers to 50's now.
Rebar prices however are stuck in the high 30's for domestic mills and haven't gone up in the last two months even though there have been scrap increases. Wire rod prices and rebar prices have extended their gap to an astonishing $7 cwt to $10 cwt, whereas production of these steel commodities are almost identical.
Foundations and concrete work where rebar is mostly used is the first phase of construction and lack of demand for rebar is a good indication that construction activity is quite slow right now. The uncertainty of tariffs, funding freezes and squeezed labor pool for construction hit the contractors badly, construction abandonment rates are on the rise and constructors confidence is on decline according to Dodge Construction network. No doubt with new tariffs much of the tariffs costs will be passed through to contractors and their margins will be squeezed on the project they committed and rising cost of housing and buildings will be a drag on new construction developers.
While Mexico and Canada are shipping less rebars to the US, the rest of the import source prices remain quite stable. However, there is also a new trade barrier threatening importers in terms of potentially catastrophic port fees, up to $1.5 million per port call for Chinese vessels, Chinese operators or any nationality of operators that have a certain amount of Chinese vessels in their fleet. This is an old government inquiry to revitalize the US shipbuilding industry. Right now more than 50% of the new vessels are being built by China and the US is building less than 1%.
Despite the significant discrepancy, the feasibility of revitalizing a labor-intensive industry like shipbuilding in the US remains questionable. The US manufacturing sector already faces a shortage of qualified blue-collar labor, making it impractical to scale up the shipbuilding industry and compete with established players like China, Japan, and Korea, especially at the expense of US taxpayers and businesses.
If these port fees are implemented, the weight of this legislation will also be crashing on the US exports. Regardless, some importers are choosing to remain quiet and waiting to see the results of the government action. |
| | | Do you think the Trump administration will proceed with the proposed port fees? |
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| | | From our content partner, SteelOrbis
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US domestic rebar drops slightly on limited demand while wire rod remains steady for a second week Wednesday, 16 April 2025 23:42:30 (GMT+3)
US domestic rebar pricing declined slightly amid unremarkable demand and continued reports of plentiful domestic supply, while wire rod prices remained flat for a second week in a row, market insiders told SteelOrbis this week.
Insiders said a recent rally in long steel pricing appears to have subsided, partly the result of reduced prices seen for April and May scrap amid reduced mill demand for finished steel and partly the result of recent actions by the US Trump administration on tariffs on imported steel and aluminum. Continued uncertainty over tariffs, contacts say, is preventing longer-term investments in infrastructure projects that normally increase yearly demand for long steel products like rebar and wire rod.
April shredded scrap in the US Midwest settled $40/gt ($41/mt) less than March at $415-420/nt ($422-427/mt), while May scrap is last heard sideways to as much as $30-40/gt less, scrap insiders told SteelOrbis. "The spot price of hot-rolled coils is getting softer, so mills are likely to consume less scrap, an insider added.
"The spot prices for domestic rebar and wire rod are very far from each other which is quite unusual, remarked another SteelOrbis insider on the on-average $7.25/cwt., or $145/nt ($160/mt) spread between rebar and wire rod. "These steel products have the same production cost so it's odd to see them this far apart in price. Normally, they're only a few bucks apart. I would expect short-term rebar pricing to increase some while wire rod prices are likely to decline as more imports come in and production from Liberty resumes."
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), down $0.50/cwt. ($10/nt or $11/mt) from seven days ago.
In the domestic wire rod market, most transactions were reported this week at $45.50-46.50/cwt ($910-930/nt or $1,003-1,025/mt), or an average of $46.00/cwt. ($920/nt or $1,014/mt), unchanged from seven days ago. Sources tell SteelOrbis domestic wire rod mills are "well booked so there is little need for price adjustment." Also, Liberty Steel remains dormant for yet another week as they continue to fight for a re-opening, they said.
"The uncertainty that Trump has created with tariffs has not helped much in the steel market," said the market insider. "There will be an adjustment period of about six months," he said. "As a result, I don't anticipate anything major happening on a pricing or demand front over that period."
US import rebar and wire rod pricing flat to down as tariff price increases could delay construction projects Thursday, 10 April 2025 16:55:24 (GMT+3) San Diego
US Import rebar and wire rod pricing was flat to a bit less this week amid continued limited demand for imports amid fear that current 25 percent steel and aluminum import tariffs on US consumers might further reduce demand for rebar, wire rod and other construction-related building materials during this year's spring construction season.
"The tariff situation is now clearer for steel," said one long steel importer. "Everyone is at 25 percent tariff, without any exceptions. We'll see, but on the demand side, many are saying that higher prices expected for many building supplies and even machinery could delay or put more spring construction projects on hold."
Insiders also fear recent tariffs could potentially result in a US and potentially global recession, further reducing demand for structural steel.
"The tariffs could result in other problems for the US," the insider added. "We could see a recession creeping in, which could result in long term declines for steel for the construction sector of the economy."
In the imported rebar markets, spot supply on a loaded truck basis at the US Gulf Coast and US East Coast was reported little changed at $36.50-38.50 cwt. ($730-770/nt or $805-849/mt), or on average $37.50/cwt., versus $37.00-38.00/cwt ($740-760/nt or $816-838/mt) one week ago. May shipments from Egypt, Algeria, Turkey and Vietnam for June-July delivery into the US Gulf Coast are last heard stable at $38.00-39.00/cwt. ($760-780/nt or $838-860/mt).
On the import wire rod mesh front, import material on a DDP loaded truck basis USG is discussed slightly less at $37.00-39.00/cwt. ($740-780/nt or $816-860/mt), off from $38.00-39.00 cwt. ($760-780/nt or $838-860/mt), one week ago.
In the Mexican markets, trading remains quiet as tariffs limit available trade opportunities. Import rebar on a loaded truck basis vicinity Houston, Texas, is last offered steady from available stock flat at $37.00-39.00/cwt ($740-780/nt of $816-860/mt), though up from $36.00-37.00/cwt. ($41.00-42.00/mt) in late March.
"Customers still have plenty of questions about these Section 232 tariffs applied on Mexico and Canada," said one Mexican long steel supplier. "They are trying to assimilate the current prices in the marketplace, and some of them have even started to place. orders for MBQ and beams."
In the weekly domestic rebar spot markets, supply on an FOB mill basis is assessed with most transactions noted at $38.50-40.00/cwt. ($770-800/nt or $849-882/mt), on average $39.25/cwt. ($785/nt or $865/mt), down $0.50/cwt. ($10/nt or $11/mt) from seven days ago.
In the domestic wire rod market, most transactions were reported this week at $45.50-46.50/cwt. ($910-930/nt or $1,003-1,025/mt), or an average of $46.00/cwt. ($920/nt or $1,014/mt), up $2.50/cwt. ($50/nt or $55/mt) from seven days ago. Market insiders told SteelOrbis output from Liberty Steel's wire and rod plant in Illinois is likely to remain limited until May or June.
US scrap prices for April delivery settle down across the board as finished steel prices may have peaked for now Thursday, 10 April 2025 01:36:07 (GMT+3) San Diego
US ferrous scrap prices for April delivery settled $20-40/gt ($20-41/mt) less this week during monthly April buy-cycle negotiations on the heels of a potential peak in the price of finished steel and considerable market jitters over the potential effects of tariffs, market insiders told SteelOrbis. Recent first quarter gains in finished steel pricing, they said, were encouraging the entry of more imports into the US, therefore mills were increasingly reluctant to continue to raise price offers.
And, following on previous reports of March scrap supply cancellations from mills, insiders said lower prices were "pretty much a given as it appeared mill appetite for fresh scrap inventory was limited. "This is the first up market we've seen in a year," remarked one Midwest scrap broker. "It's quite disappointing to give it all back already."
Since January 1, SteelOrbis data shows Midwest shredded scrap prices had increased from on average $378/mt ($342/nt) to a high of $399.50/mt ($362/nt) at the end of March, a 5.7 percent rise. On April 1, 2024, Midwest shredded prices averaged $406.50/mt ($369/nt), up from a recent March scrap high of $439.50/mt ($399/nt) seen on April 10.
Insiders said late in the April supply negotiations that tariff-related actions by US President Trump was dominating the news, increasing uncertainty among steel market players.
"There still seems to be a lot of uncertainty out there, so bigger drops could be in store for April scrap," another Midwest scrap insider said prior to the lower monthly settlements.
"In my opinion the lower scrap numbers were a direct result of an increase in economic uncertainty cause by tariffs, that made people hit the pause button at a time when things normally start to pick up for the year," said another Midwest scrap insider. "The thinking is that we might see some more declines in May, as right now the market is seen at sideways. So, while the reciprocal tariffs are in place, as we have seen recently, the situation could change on a day-to-day basis."
"Scrap went down $40 a ton, and I think its partly because of the tariff situation and continued market uncertainty," said one Mexican steel insider. "Normally, during the second quarter, scrap goes down, but not my this much."
This week, steelmaker Nucor kept its Consumer Spot Price (CSP) for flat rolled coils steady for a third straight week at $935/nt ($1,031/mt), or $46.75/cwt. Since the beginning of 2025, Nucor had increased its CSP price by 24.7 percent, while from its inception in April 2024 at $830/nt ($915/mt), the CSP was up a more conservative 12.7 percent.
In the end, US Midwest April busheling scrap settled on average $20/nt less than March settles at $465-490/nt ($472-498/mt). while April shredded scrap settled $40/nt less at $415-420/nt ($422-427/mt). April HMS 1 settled $30/nt less at $365-385/nt ($371-391/mt), while P&S grades settled $40/gt lower at $401-411/nt ($407-418/mt).
In the US Northeast, late market calls for April scrap found similar grade-based declines as the Midwest with April prime busheling scrap $20/nt less at $410-430/nt ($417-437/mt), shredded at $40/nt less to $365-375/nt ($371-381/mt), while HMS 1 closed April negotiations $30/nt less at $345-360/nt ($351-366/mt). April P&S dropped a full $40/nt to $335-345/nt ($340-351/mt), market insiders told SteelOrbis. |
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