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  1. Update – Scrap Settles, Tariffs Announced and Price Announcement

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    A flurry of rebar market news was announced on Monday, starting with Chicago shredded scrap posting final at $430/ton, up $50/ton from January and a total of *$70/ton since the end of 2024 (*correction from the $80/ton previously stated). An increase was expected, but the degree to which the increase posted caught many by surprise. Difficult weather conditions affected collections in January, coupled with higher demand for scrap from the mills in anticipation of robust order books stemming from pending tariffs, leading to the large jump in price.

    The tariff rollercoaster took a sharp turn over the weekend with Trump focusing his energy on revisiting the 232 tariffs. On Monday the administration announced it was closing all exceptions, exemptions, carve-outs, and quotas to the 232, and 25% would apply to all imports. This could potentially affect countries such as Brazil, Spain, Ukraine, Greece, and Bulgaria, as well as NAFTA partners Canada and Mexico. The details of the implementation as well as the timeline are still being verified; however, indications are the changes may be in place March 4th, which would coincide with his extension on tariffs for all products from Mexico and Canada. Further, it is unclear if changes extend to the countries that were already being penalized the full 25%, such as Turkey, Algeria, and Egypt. More details will undoubtedly follow in the days to come.

    The last major development of the day was a leading manufacturer of rebar announcing a $40/ton hike on rebar pricing effective on new orders. The size of the bump was surprising considering a smaller $30/ton increase was implemented a month ago. However, given the developments of the day, it is highly likely that all the mills will follow with versions of their own increases shortly. We will continue to monitor these and other developments affecting the rebar market and report as they develop.

  2. Month End Market Comments

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    As January draws to a close, the rebar market looks ahead to some potential volatility. The month of January saw a $30/ton price increase announced by Nucor, which was immediately followed by all the other manufacturers. Poor weather and slow seasonal demand in January served to slow the implementation of the increase throughout the month, but by the end of the month, most report that the increases are in place, and eyes are looking at the month ahead with potential tariffs and increased scrap costs serving to further strengthen pricing in the rebar market.

    The new administration has warned of implementing 25% tariffs as soon as tomorrow, Feb 1st on Mexico and Canada as well and an additional 10% on China. There are different opinions on if these tariffs will indeed be implemented, on how they would be implemented, and on what products they would impact. If they are implemented, the greatest impact on the rebar market would be on rebar imports from Canada and Mexico, which combined export approximately 300-400K tons annually to the US. While that volume is less than 5% of the overall US rebar consumption, a 25% tariff could immediately wipe that volume out of the market and, in certain regions and lanes, create a short-term shortage.

    The tariff threat is also impacting other steel markets to a larger extent than rebar, causing increased demand on the domestic mills and consequently a larger than expected demand by those mills for scrap. Add to it the extreme weather through most of the US in January, which curtailed collections; a scrap increase for February is now likely. Most expect another $20-30/ton increase for February, which follows the $20/ton increase from January. Some regions and markets that were affected more by the weather conditions in January; the increase may even be more. While buyers are quick to point out that the size of the first increase in January exceeded the scrap increase last month, if the February scrap pricing is strong enough, mills may look to try another increase.

    Globally, mills are once again looking to the US market as a possible export opportunity with the new price increases, especially the mills that are outside of North America. Mills that have been non-competitive for the past several months are closely watching the US price to see signs of opportunity to deliver to the US markets. Any increase in the US market price could only serve to entice buyers to look once again at import rebar channels. Lead times remain 4-5 months for imported material, so enough price cushion is required to merit the risk. January did see some new imports booked, and with additional mill price increases a possibility, it would likely encourage additional imports booked in the weeks ahead. No doubt domestic mills will wager that into their pricing decisions as well as they move forward.

    The month ahead looks to be ready to serve up some interesting developments in the rebar market. Your friends at Adelphia Metals will continue to keep you posted on any developments that may happen. In the meantime, have a great weekend!

  3. Scrap Trade and Price Increase Announcement

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    Chicago Shredded Scrap finalized last Friday at $380/ton up $20/ton from the prior month. Despite a weak export market, the scrap price rallied on restocking needs of the Domestic mills heading into the New Year. Also on Friday, one of the major domestic rebar manufacturers wasted little time in following the scrap increase and announced a $30/ton increase in rebar pricing effective immediately on all new orders. The market will watch this week to see if the other rebar manufacturers will come up with increases of their own to support the move. In November, a similar announcement was made but not supported by all the mills. This time, however, given the timing heading into the New Year, along with the recent shift in raw materials pricing, it is expected this increase will have support from the other mills this week and Domestic mills will be looking to try to move the rebar market price up.

    We will continue to keep you posted with developments in the rebar market.

  4. Year End Rebar Comments

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    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!

  5. Shredded Scrap Posts Down $10 For December

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    Chicago Shredded Scrap posted today for December, down $10/ton from November at $360/ton. Most had expected a sideways move for the month but once trade began this month, low global raw materials and export opportunities dragged down the trade here in the US. Scrap dealers had no choice but to concede a slightly lower price moving forward. It is doubtful this move will have much meaningful impact on the rebar market as most are expecting a rebound in Q1 with the change in presidency and seasonal tight raw material trade.

    We will continue to keep you posted with moves that impact the rebar market.

  6. November 2024 Rebar Market Update

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    November closes a choppy month in the rebar market. The month started with a price increase announcement to begin the month of $30/ton. It was followed by most mills in most regions, but not all. This caused some confusion in the market throughout the month. By the end of the month, the market seemed to ultimately reject the increase, and most market participants feel we currently sit where we started. The market seems to have found footing with the recent election, low import availability and tight domestic supply. At the same time, adequate supply, slowing seasonal demand and concerns over inviting imports with a higher domestic price was enough to thwart the increase. For the time being the pricing may not have increased in the rebar market but very few are talking of lower pricing either to end the month.

    On the domestic side, inventory remains tight at the mills, with manufacturers opting to continue to be very conservative on what is produced, relative to what is ordered. Domestic mills are enjoying strong demand as buyers continue to shift their needs from import to domestic product. The increase calls have caused mills to run low on many sizes in many regions especially for this time of year. Domestic mills still have ample capacity to keep up with demand at this point on upcoming rollings, especially heading into the year end, but the strength in orders is a welcome change from the past several months.

    On the import front, bookings continue to remain difficult. The failed price hike in November did little to sway buyers to load up on import for next season. In addition, the incoming administration has threatened increased tariffs which could affect import supply by creating potential tariff costs for importers of record. Bottom line, would be import buyers still struggle to find value in the import offers when weighing the pricing and the risk involved with bringing product in. Expect this trend to continue moving forward into the new year.

    On the raw materials front, scrap looks again sideways. While traditionally there is upward pressure on pricing in the winter due to lack of collections, that pressure seems to be off set currently by a global decline in pricing. Last month saw traditional export scrap markets soften which gives US scrap dealers less options to deliver their scrap supply. They are forced to negotiate only with domestic mills giving the mills the upper hand. The most likely scenario to close November is another month of sideways trade for December holding off potential increases until beginning 2025. The final number will likely come out late next week at which time we will update.

    Lastly and most importantly this week, we at Adelphia Metals would like to wish you and yours a safe, happy and healthy Thanksgiving Holiday!!

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