2024 failed to deliver the robust rebar results that most market players had hoped for. Supply was readily available throughout the year in most regions, and most market participants agree that its likely outpaced demand, which was likely flat to slightly down for 2024 compared to the prior year. Mills exhibited great restraint throughout the year in continuing to roll only what was ordered and avoid an over-supply situation. Still, the confidence that tons were available if needed prevented any sharp spike increases or fears of scarcity situations. Raw materials stayed flat to down for the better part of the year except for one 30-day bump in late Q1 of the year. The stability in raw materials further prevented the threat of increases throughout the year. Instead, mills felt the gradual pressure to reduce pricing to remain competitive, and the year-over-year pricing fell by 10-15%, depending on exact product & regions.
Looking ahead to 2025, there remains conflicting signals on the direction of rebar. There is a belief that the markets are due for the “seasonal bump” in the first quarter or early 2nd quarter. Historically, scrap is difficult to collect in the winter, so supply tightens. Meanwhile mills demand for scrap increases as they prepare for the coming season and ramping up production. The result can be a sharp bump in scrap that ultimately the mills look to push the price with. The trend has not happened yet, and January scrap looks sideways to potentially down. If there is a seasonal bump related to scrap it will likely happen in February or March.
Most believe that some sort of increased tariffs can be expected in 2025 with the change in administration in January. Historically tariffs curb import supply, which leads to fear of scarcity and higher prices. The US market has become much less dependent on imports but if heavy tariffs come, there will likely have some increased effect on pricing, especially in the short-term. Additionally, the change in administration is also expected to bring about a more “construction-friendly” environment which could also lead to increased demand in the coming year. Traditionally with higher demand comes higher pricing.
Not all signals point to higher pricing, however. There is a lot of new capacity scheduled to come on-line in 2025, which will affect the supply picture. Expect mills to be aggressive to fill their order books and to the extent that the market has enough demand for those new tons will be the main driver on pricing. Mills will likely continue to monitor rollings and supply to not over-produce which will also hold pricing in check.
Heading into 2025, the market will be undoubtedly pulled in multiple directions. Factors mentioned as well as ones we have yet to consider will impact the scope of the business next year. While there remain few certainties in the rebar business, one you can count on is that Adelphia Metals will be here to update you on the market and the events that will impact it.
Happy New Year and very best wishes for a safe, happy & prosperous 2025!