Steel Rebar Pricing Drifts in Mid-November in the US Market
- 17-Nov-2022 6:19 PM
- Journalist: Jacob Kutchner
Steel Rebar prices in the US market have been relatively quiet over the last week as buyers in the construction industry prepared for a seasonal slowdown in demand. Several Steel Rebar mills in the US recently reported record quarterly and year-to-date earnings, with significant backlogs heading into the first quarter of next year. According to market participants, Steel Rebar prices are still hovering around last week's prices. Still, multiple sources predict that the market will soon find a bottom as steelmakers approach or even meet breakeven points.
Steel Rebar spot prices have fallen by USD 11/MT since the beginning of November 2022. A local distributor points out that this latest decline results from seasonal demand changes in the construction industry, which has begun to wind down for the winter. Meanwhile, falling Steel scrap prices are not helping to strengthen Steel Rebar prices. Offers were reported for Steel Rebar between USD 900-918/MT and settled at USD 909/MT Ex US Midwest. Lower trading activity was observed in the spot market, but significant purchases of 10,000 MT or more were made at USD 900/MT or below. Small transactions were only able to be confirmed.
According to our sources, Steel Rebar prices are still higher than pre-Covid-19 costs. High raw materials prices have been blamed for higher conversion costs, with expensive pig iron inventories and higher-priced scrap inventories being the main culprits. Despite scrap prices continuously falling for seven months in a row which is approximately 53% since June 2022, Steel Rebar mills continued to work through stocks acquired at higher levels in previous trades. Steelmakers and some service centers believe the Steel Rebar market is finally approaching an absolute bottom.
Downstream demand is said to be good, with many companies reporting that shipments were relatively flat for the past few months. With the US Thanksgiving holiday coming up next week, market players expect the Steel Rebar demand outlook to plummet and lag for the rest of the year. A potential strike at US Steel by its United Steelworkers (USW)-represented workforce, which reached a tentative agreement with the steelmaker last week, has been removed from the market. A possible rail strike that would have repercussions throughout the US economy is looming in December 2022 after at least some of the unions involved voted down their tentative agreement. A strike could disrupt much of the US economy, including scrap shipments into steel mills and finished steel shipments out of them.
As a result of the pent-up construction demand, the Chemanalyst predicts that Steel Rebar prices will skyrocket in the coming months.