US longs buyers and suppliers step back to evaluate market conditions as new 50% Section 232 tariff in force
Thursday, 05 June 2025 00:48:15 (GMT+3) San Diego
US domestic and import long steel pricing is assessed steady this week, following today's June 4 start of expanded 50 percent import tariffs from the US Trump administration on imported steel and aluminum, market insiders told SteelOrbis. Some insiders expressed concern to SteelOrbis that higher tariffs could further shrink already scant finished steel demand as more infrastructure projects stand to be put on hold amid uncertainty with current and future Trump tariff policy.
"The 50 percent tariff will continue to reduce [import) demand and could cause the market to shrink. Most will hold off on buying." said another domestic SteelOrbis insider. "Nobody is in the mood to negotiate," said another wire rod insider. "Overall, there is more uncertainty surrounding the tariff increase, and the actual effects won't be known until the dust fully settles."
While weekly prices have yet to show an increase as tariff issues get resolved, it appears clear that uncertainty and frustration. remains high as many long steel importers disagree with the US presidents' efforts to use tariffs as a strategy to protect the ailing US steel industry.
"These tariffs were a real surprise to us. an insider said. "It represents a major crisis to any consumer who has to buy steel, he added. "It's a big mess that Trump has started, and the whole industry is dealing with it today."
Insiders report new steel orders are scant with price assessments problematic as buyers and sellers are consumed with trying to figure out how much of the tariff price increases each side might be willing to absorb, rather than rolling straight price increases out to the marketplace and then facing the likelihood of enhanced competition from domestic mills for available market share. "One of my main suppliers in the Houston import market is not on offer anymore, remarked one Gulf Coast long steel importer, reflecting on the unforeseen June 4 tariff increases from 25 percent to 50 percent. "Everybody is (facing) higher numbers, but they're not yet sure how to price their inventory," he said. "Most are likely to wait until the dust settles and then start trading at numbers that are higher than today. However, that is, if the markets accept the higher prices."
Insiders expressed clear frustration amid reports that some traders at domestic mills were "popping champagne and celebrating" the June 4 tariff increases, as they know a reduction in steel imports as a result of higher tariff fees could allow domestic producers more levity to raise their own prices.
"This [tariff] is going to eliminate lower-level imports," another market insider told SteelOrbis referring to supply contracts able to be fulfilled from multiple sources. "There's plenty of production in the US which will be able to sell at a higher price."
On the US Gulf Coast, against a backdrop of continued reports of high inventory, import rebar on a loaded truck basis vicinity Houston is last assessed at $35.00-36.00/cwt., or on average $35.50/cwt., off from $35.00-37.00/cwt., or on average $36.00/cwt., or $720/nt ($794/mt) two weeks earlier.
"New orders with the expanded steel tariffs could rise by $6.00-7.00/cwt. ($6.61-7.72/mt)," the import insider said, though, more importantly, people are beginning to wonder what will happen with steel cargoes that are still in transit," he said. "We expect traders will be talking to their customers, trying to see whether they will be able to pass on some of the additional fees."
Import experts told SteelOrbis short of a decision by buyers and sellers to split the cost of added tariffs, some buyers may have to declare a "force majeure event and declare that the cargo is distressed. The last time force majeure was used in supply contracts was during the height of the Covid-19 pandemic in 2020, when supply chains were severely disrupted, they said.
In the domestic rebar markets, domestic supply on an FOB mill basis is last assessed at $37.50-38.50/cwt., ($750-770/nt or $827-849/mt), on average $38.00/cwt., ($760/nt or $838/mt). While this pricing is "trending upward due to the new tariff increase," price increases could take longer to be reflected in weekly markets owing to current high reported inventories. Inventory in the Southern US is expected to remain robust in the near future as Osceola, Arkansas-based Hybar LLC has also announced its first rebar production at their new steel mini-mill in Osceola, Arkansas, with plans to produce over 700,000 metric tons of rebar annually.
In the domestic wire rod market, pricing is assessed at $44.50-45.50/cwt ($890-910/nt or $981-1,003/mt), or an average of $45.00/cwt ($900/nt or $992/mt). While no new price increases are noted at press time from Nucor and other major mills, this pricing is also expected to trend upward amid the new tariff increase, insiders said.
"With the current tight supply, wire rod prices could increase $100/ton and they would still generate orders, an insider told SteelOrbis, reflecting on continuing supply shortages in the domestic wire rod segment, most recently the result of reduced output from Peoria, III-based Liberty Steel.
June scrap pricing seen sideways to down following start of new Trump Section 232 steel tariffs
Thursday, 05 June 2025 21:15:48 (GMT+3) San Diego
The June scrap market, following the June 4 start of new Section 232 steel and aluminum tariffs by the US Trump administration, is now seen settling sideways to about $10/gt less than equivalent May scrap negotiated values, market insiders told SteelOrbis this week.
The June call, throughout the weeks leading up to the start of June supply negotiations, has strengthened overall, insiders say, from one of steady to potentially $20/gt less, mostly on reports of solid domestic inventory and expectations for limited export scrap requirements, to one of "sideways at best to down $10/gt."
"I have been hearing that scrap will be sideways to down slightly from May levels in June," said one Gulf Coast scrap insider. "But for sure, the recent tariff increases add even more uncertainty to the market as the situation could change next week."
Finished steel insiders tell SteelOrbis that growing uncertainty over President Trump's on-again-off-again global tariff policy may be further delaying the start of important domestic infrastructure projects which could be supportive for domestic steel pricing. SteelOrbis historical data shows local HRC pricing has declined nearly 25 percent since reaching a high of $950/nt ($1,047), or $47.50/cwt., on March 22, while during the same period, domestic rebar pricing has dropped 6.75 percent from $40.75/cwt., ($815/nt or $898/mt) to $38.00/cwt., ($760/nt or $838/mt).
"We're hearing now the expectation for a sideways summer, and maybe trending higher later if these tariffs hang around," said one Midwest mill scrap buyer. "Suppliers of course, are going to try to push the narrative of up (for prices), but almost every supplier that I talk to is saying sideways in the best case."
"The demand trend is down, noted another Gulf Coast rebar insider that follows the scrap market for pricing clues. "I think June will end up more sideways as a result of low mill demand and new tariffs."
During June scrap negotiations, no May scrap cancellation orders, nor posted price decreases from domestic mills were noted.
"All the June scrap markets now appear sideways," yet another scrap insider told SteelOrbis as this report went to press.
While June buy-cycle negotiations could conclude with settles available as early as tomorrow, June 6, a sideways to $10/gt less versus May settlement call would peg US Midwest prime busheling scrap in the Ohio Valley steady to $10/gt less than the $435-460/gt ($443-468/mt) May settle, while shredded scrap could settle at or $10/gt below the $375-380/gt ($381-387/mt) settle. Ohio Valley P&S and HMS grades could settle at to $10/gt below the $361-371/gt ($367-377/mt), and $325-345/gt ($330-387/mt) May settles, respectively, scrap insiders said.
In the US Northeast, while no grade-specific forecasts were noted as of press time, a sideways to down $10/gt June scrap expectation would yield US Northeast busheling scrap at to $10/gt below $380-400/gt ($387-407/mt), while shredded grades could settle at or $10/gt below $325-335/gt ($330-342/mt). P&S and HMS grades could settle at to $10/gt less than the May settle of $295-305/gt ($300-310/mt), and 305-320/gt ($310-325/mt), respectively, scrap insiders said.
