As the rebar market enters Q2 of 2025, some patterns are beginning to emerge. While other steel products continue to rally in price, rebar appears to have leveled off with consumers gaining confidence that supply will support demand moving forward. The $100/ton in scrap increases in the first quarter have only been able to support $70/ton of increases from the steel mills in the first quarter. While other steel products have experienced price hikes of 4-5 times that amount, rebar has remained rather conservative. Still, the increases have created an active market in Q1, and as we begin the second quarter, supply remains tight at the domestic mills, and overall inventories are minimal.
Domestic mills were able to keep up with stronger Q1 demand in the rebar market, albeit they had to deplete most all on-hand stock in doing so. Now with the higher market prices, the pace of new orders has slowed somewhat, allowing mills to have space on rollings, catch up, and once again have some breathing room moving forward. There is not a lot of material on hand at most mills to begin April, but with most outages now in the rearview, mills have growing availability for the months ahead. Mills are pushing to maintain pricing but are starting to see pressure from both import pricing as well as signs of a scrap market that may have peaked and is beginning to retreat. Mills will weigh the strength of their order books to try and resist the calls to reduce pricing.
On the import front, pricing has begun to gain traction with the gap between domestic and import increasing over the first quarter. However, import supply still faces challenges. The political discussions involving tariffs and retaliatory tariffs as well as potential trade hurdles levied on the shipping industry have increased the risk of bringing in imported products. Higher prices are being offered in most cases to offset these risks. Unfortunately, those higher prices reduce the price gap and reduce the attractiveness of the offers. As a result, offers on imported material have slowed heading into the 2nd quarter. There will be some imported products arriving in the months ahead, but the volumes currently look to be controlled, and the pricing is up somewhat from where we started the year.
On the scrap front, after a 3-month run of increasing prices, April looks to potentially show signs of a plateau and quite possibly a backslide. The strength of the entire steel sector undoubtedly helped fuel shredded scrap prices higher and sustain the raw material rally longer, but signs of fatigue are starting to emerge. Ample supply of shred is now available heading into April. At the same time, mills have curtailed their demand for the product in the months ahead, putting some downward pressure on the prices. Dealers are getting little help from the export market as global prices are much lower than the pricing in the states, forcing them to only find homes in the US market. There is a strong likelihood scrap prices will soften for next month. Most believe that the market will give back most, if not all, of the March gain of $30/ton back in the April trade. It is still several days away from posting and subject to change. I will update when it does post.
In the meantime, have a great start to April. Spring is right around the corner!!!