Continuous price stability in the cards for US rebar market

Thursday, 28 July 2011 02:38:02 (GMT+3)   |  
       

With virtually no competition from imports, US domestic rebar mills will likely enjoy a firm grip on spot prices for the rest of the quarter.

Import offers for rebar to the US--from both overseas and south of the border--are still prohibitively high, and there have been no developments in the US domestic market to indicate that domestic prices will be higher by the time offshore orders placed now arrive in late Q3.  Shredded scrap prices are expected to move sideways in August, which would undoubtedly result in neutral US domestic rebar prices for September shipments.  US mills are well aware of this, and as such they have had no problem holding on to current spot prices of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) ex-mill, exuding a "take it or leave it" attitude that is bolstered by relatively stable demand levels in the US.

Meanwhile, import offers have remained on the sidelines.  An uptrending Turkish rebar market increased export offers to the US in the last week, but US traders have been reluctant to pass it on--already, Turkish import rebar prices in the US are about $1.00 cwt. ($22/mt or $20/nt) higher than US domestic spot prices.  To say US buyers are not interested in current Turkish prices of $35.00-$36.00 cwt. ($772-$794/mt or $700-$720/nt) DDP loaded truck in US Gulf ports would be an understatement, but there is not much indication that Turkish mills will adjust prices to better reflect the US market.

South of the border, Mexican rebar mills have not budged on their offering prices, which are (for the most part) identical to US domestic spot prices.   Some prices for certain customers have been reported slightly lower--about $0.50 cwt. ($11/mt or $10/nt) less--than the current range of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck delivered to US border states, but overall, there is not much incentive for US rebar buyers to import from Mexico unless they are getting some sort of a deal. 


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