Despite holidays, US rebar market picks up speed

The US rebar market seems to be picking up again, with demand showing signs of improvement since last week. Import prices are going up, and most mills are refraining from making offers until the new pricing level is established. Turkish mills are raising rebar prices without a substantial increase in US buying because of the high prices achieved in the Persian Gulf market and also the decent local demand as well as the increase in scrap and billet prices in the Black Sea area. In addition, export rebar prices have also been going up in Asian countries, such as in Taiwan, Malaysia and Thailand. Even though demand is not as strong in the US yet, some of these higher numbers are starting to be accepted by the US, as import prices will likely rise again after the holidays. This week, import rebar offering prices have increased by approximately $0.50 cwt. ($11 /mt or $10 /nt) since last week, now ranging from $25.50 cwt. to $26.50 cwt. ($562 /mt to $584 /mt or $510 /nt to $530 /nt) FOB loaded truck, in US Gulf ports. The pricing trend is still slightly up. Traders report that there are a lot of inquiries coming in, which is an indication that domestic mills are full and that possibly first quarter demand will again exceed domestic production. Also, US scrap prices seem to have bottomed out and are on the rise again. With higher scrap prices, domestic rebar prices should start to go up as well. The housing market is still slow, however, economic analysts do not expect any upcoming crash. On the whole, the economy is expected to improve in 2007, with strong non-residential construction, and in turn, strong rebar sales activity in Q1. Although demand is picking up as distributors are looking forward to the spring, sales on the ground are still cut-throat, with distributors trying to cut their losses by getting rid of excess inventory at bargain rates. This flurry of sales activity is expected to cease with the New Year, and then distributors will be rushing to replenish for March arrivals. Domestic mills are still offering rebar at a range of $26.65 cwt. to $27.15 cwt. ($588 /mt to $599 /mt or $533 /nt to $543 /nt) ex-mill. The usual price extras apply for smaller sizes and grade 60. For now, the pricing trend is neutral, as it is possible that these prices will stay flat for at least another month before they start to rise.