June Chicago Shredded Scrap posted final late Friday at no change from the previous 2 months at $430/ton. The sideways posting was widely expected going into the trade with ample scrap supply available and demand staying relatively stable. With a stable raw materials cost structure, mills will face headwinds trying to increase pricing further, as buyers will be quick to point out that the increased spread will put pressure downstream on a market that is already feeling the pain of inflation. At the same time, supply remains tight on rebar, so mills will struggle to resist the urge to benefit accordingly.
We will continue to keep you posted on events in the rebar market.
As June starts, the rebar market remains persistently strong. The increases announced in the last month for both East and West Coasts have begun to take hold, and solid demand is revealing short supply in several areas and several items. Market conditions heading into the year have kept traditional stockists from “loading up” on inventory, and consequently, supply remains low to start the summer season. Rumors have begun to swirl about further increases this summer, but threats of imports ramping back up coupled with stable or declining scrap prices seem to keep the domestic pricing in check, just trying to realize the full increases already announced. An incredibly tight logistics market is only furthering higher rebar prices to start June.
On the domestic side, the West Coast is stronger than the East. Lack of imports and fewer mills are reflected by a tighter supply picture. Most agree that the demand out West is not overly strong… however, the supply concerns are strong enough that the full $50/ton increase announced early this year looks to have fully “stuck” as we head into June. East of the Rockies, the $30/ton announced last month struggled to gain traction, but the demand looks to be picking up the slack… and now the increases have started gaining ground. A dwindling import picture also contributes to tight supply in the east and increasing pricing pressure in the east.
Imports struggle to gain relevance in the US market. With the continued tensions in the Middle East driving ocean freights higher, import mills struggle to be competitive with high ocean freights and a 50% duty. Imports are available, but in most cases, current numbers for future shipments are the same or even higher than domestic current numbers. Still, import offers provide a backdrop for the market price and prevent the domestic price from increasing dramatically heading into the future. The most attractive offers are coming from Asian sources with extended lead times.
On the scrap front, pricing looks to show very little change. After moving sideways in May, shredded scrap looks poised to remain the same for June, if not come off a bit. The lack of increase helps to hold future prices in check as the spreads between raw materials and finished goods remain at or near all-time highs. Any upward movement in price without the support of raw materials could create a negative impact on the manufacturer’s image and their position in a market that is already experiencing heavy inflationary costs and margin reduction downstream. If mills do decide to bump the price, customers will be quick to point out that the scrap market has not moved in the last 90 days. Expect final scrap numbers to be available in the coming days.
We will continue to keep you posted on developments in the rebar market as they happen. Have a great week!
Chicago Shredded Scrap posted officially this morning sideways from April at $430/ton. This is in line with expectations to begin the month, as scrap supply is ample, but demand from mills has also picked up. Despite posting sideways, Mills announced rebar price increases previously that the market is digesting. While mills do not necessarily always follow the raw materials dollar for dollar, typically it is raw materials, namely shredded scrap, that are a leading indicator of how rebar pricing will move.
We will continue to monitor events in the market and update accordingly. Have a great week.
A leading domestic mill announced a $30/ton price increase on rebar late Friday for its mills east of the Rockies. On the surface, it would appear this was a follow-up to the increase from 2 weeks ago west of the Rockies. In addition, the announcement increased the spool adder by an additional $20/ton. While the move was unexpected by most, increased rumors had started circulating last week of potential further increases. Typically, all mills follow a move like this within the coming days; however, this increase may fight some headwinds as buyers in the East do have other options, and increased pricing could force their hand. We will continue to keep you posted on developments in the rebar market.
The rebar market shows signs of strength heading into the month of May, following a similar trend to most steel products and the entire steel sector. Pricing in the rebar market has been pressured upward by a $50/ton increase announced out West 2 weeks ago. In addition, the freight market continues to be stubbornly tight due to limited drivers and high fuel prices. Other similar steel product prices are also on the rise, such as merchant and rod prices. These situations are putting pressure throughout the country on rebar pricing. Published rebar price increases were limited to the West because of supply issues for the mills that dominate in that region. East of the Rockies, rebar supply is improved, with added capacity in the market starting to ease supply concerns. In addition, imports affect the eastern side of the country to a greater extent than the west, further aiding the supply situation. Most agree that the market will remain firm through Q2 and possibly beyond with a growing bullish sentiment.
Domestic mills continue to be full and able to fill their rollings. Out West, there have been some production hiccups that have really tightened supply and caused pricing to rebound from earlier year lows with the recent price announcements. Most are reporting longer lead times and supply holes in certain items. Today marks the first day of the increase in effect, so the market eagerly waits to see if and when the full $50/ton is absorbed. In the Eastern half of the country, supply is much improved from several months ago, with both Hybar and Lexington now contributing meaningful tons to the market on a consistent basis along with imports coming in that were placed late last year. Lead times have improved. While the market is far from an oversupply in the east, demand and supply seem to be better balanced currently.
On the import front, the effects of the conflict in Iran continue to hurt global ocean freights and damage import opportunities. The high price of fuel is driving up vessel costs, and foreign mills struggle to compete in the US with domestic pricing setting the market. While imports are arriving that were placed prior to the conflict, very little new business has been placed since it began nearing 2 months ago. Look for a gap in import supply in the second half of 2026 because of the higher freight prices and the lack of competitive offers from foreign mills.
One scrap from the fall in scrap from last month is expected to be followed with a sideways move for May. Scrap flows remain strong, but demand from the mills has picked up as well. The overwhelming prediction is a sideways move for May. If there is an adjustment, it would be minimal at best. Scrap is expected to report late next week, and we will advise.
In the meantime, have a great start to May and a great weekend ahead!
The major mills have announced price increases affecting West Coast rebar supply. Mills are looking to increase rebar pricing out West by $50/ton. It is unique in that it is only for the West Coast, where there have developed recent supply constraints, and the price increase announcement is likely a function of the tight supply. In addition, there is less impact of import supply out West, which only serves to further tighten the market. Demand out west remains lackluster, so the common consensus is the announcement has more to do with supply. The rest of the country faces a better supply picture, so it is uncertain if increases will be announced in the other regions.
In another separate announcement, a major manufacturer announced a $15/ton upcharge on all non-standard length orders. A cut-to-length charge is not that uncommon, and this announcement was likely just to reaffirm the charge as the ramp-up in both border wall construction and data storage construction is expected. Both utilize a large volume of cut-to-length material. Mills are likely looking to ensure they are priced properly for this work ahead.
We will continue to update developments in the market as they occur. Have a great week.
