September Month End Rebar Comments
Tight inventory supply and longer than expected lead times are dominating the news in the rebar market to close the month of September. Conditions failed to improve during the month as several mills throughout the country experienced a wide variety of issues that curtailed their supply and pushed back their rollings. Buyers were left scrambling to cover their needs, and that only added to the appearance of strong demand throughout the month, despite little evidence that YOY, more rebar is moving through the system to close the summer. As we head into the month of October, things are expected to remain tight in the month ahead with mills completely sold out, upstart mills failing to deliver meaningful tons, and very little import in the pipeline.
Domestic mills across the country continue to struggle to supply the market with the bar it is demanding. The import squeeze levied from the increased tariffs in June was expected to be more than offset by new capacity coming online in the 3rd quarter. However, as we enter the 4th quarter, none of the 3 new mills have been able to bring about meaningful tons to the market yet. To compound matters, the current domestic capacity has struggled heavily in many mills in the 3rd quarter to maintain even their scheduled rollings. Both factors have created a tightness in supply that the market has not seen since covid. Most agree it will be limited, as the new mills will likely gain their footing in the months to come, and demand will slow with the seasonal trend in the year. Still, the outlook from October into November remains solid.
On the scrap side, other steel markets (besides rebar) continue to drag down the demand for raw materials. While the demand from the rebar mills may be solid, scrap dealers are at the mercy of other, larger market segments that have slowed throughout the 3rd quarter heading into the 4th quarter. Without strong demand from the entire steel sector, most expect the scrap market will retreat somewhat this month after a long period of stability. The scrap is expected to post next week, and we will advise accordingly. A softening scrap market, as well as the increasing supply outlook for rebar and a seasonal slowdown in rebar demand, has mills pausing on pushing the rebar price higher as of now.
On the import front, very few offers are heard in the market. Trade cases filed against Vietnam, Bulgaria, Egypt, and Algeria have kept the traditional import sources at bay. The additional 25% tariffs levied in June have limited other origins from being able to compete in the US market. With mills holding their current pricing, there will be very little opportunity for foreign mills to compete in the US market unless something changes.
We will continue to monitor events in the market and will keep you posted. Have a great start to the final quarter of 2025.
