July Close – Market Comments
Happy Friday!!!
July closes in the rebar market with solid activity on several fronts. Demand continues to be bolstered by heavy data center builds throughout the country, large demand from border wall projects, and a growing demand stemming from increased energy needs throughout the country. These areas are enough to move the needle and offset a softer residential demand that is tied to higher interest rates and commodity prices. Throughout the country rebar fabricators (which constitute the largest users of rebar) report heavy backlogs that extend out until the end of the year. On the supply side, certain regions face tighter supply constraints than others. The West and upper Midwest regions remain very tight in supply as mills struggle to keep pace with demand. In the south it is much more in balance, and the east is showing the strongest supply base in the country. The result is almost opposing pricing pressures depending on which region you are in.
The mills, in general, are reporting strong backlogs throughout the country. In the regions that contain fewer mills (West and Midwest), order books exceed what the mills can produce. Not surprisingly, out West, mills announced a price hike last month that is starting to gain traction. In the other regions, with more mills available and producing, additional “shipping” points are holding pricing at bay. Mills in general are still seeing record spreads between sale price and raw material costs, so they remain content to maximize production and benefit accordingly. The solid market demand is helping them do it.
On the import front, foreign mills still struggle to gain relevance in the US market. High fuel prices continue to hold ocean freights high. Foreign mills simply can’t compete at the same price level as domestics with the added expense of 50% duties AND high ocean freight. Expect foreign material that was secured prior to our conflict in Iran with lower ocean freights to trickle in in the weeks ahead, but the level of imports will decline significantly in the second half of 2026, as very little has been booked in the last 3 months. This will only keep overall supply tight and pricing stable in the months ahead.
On the scrap front, shredded scrap remains very stable to start the month after several months of sideways movement. There have been a few export scrap cargos sold recently, which helps increase demand; however, scrap dealers still report ample supply. Expect domestic mills to work to push the price lower in August. If successful, it would only likely be $10/ton, but scrap dealers are expected to try and hold their ground moving forward. We will report any scrap updates when they are posted.
In the meantime, have a great weekend and a wonderful start to August.
