Although shredded scrap is projected to drop slightly--around $20/lt--this month, the US domestic rebar market was still rather shocked when Gerdau announced an immediate $1.00 cwt. ($22/mt or $20/nt) base price decrease Wednesday, blaming "increasing competition from domestic and foreign producers." After all, demand is relatively healthy and import interest is not reportedly much different than a few weeks ago, indicating that something else--namely the "domestic" part of the equation--was behind the move. According to sources, a competing US mill has been supplying one of its affiliated distributors with significantly discounted rebar, effectively pushing other major distributors out of the market, and with them, their mill suppliers. Gerdau's move was intended to put them on more equal footing, and while no other mills have formally announced a similar move, it is expected that the general spot range will drop down to $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) ex-mill, reflecting the $1.00 cwt. decrease.
As mentioned, interest in imports is not as significant as Gerdau made it out to be in its letter, but traders do report ample interest in falling Turkish and Mexican offers. Offers from Turkey dropped $0.25 cwt. ($5.50/mt or $5/nt) in the last week to $29.25-$30.25 cwt. ($645-$667/mt or $585-$605/nt) DDP loaded truck in US Gulf ports, while Mexican mills dropped their offer prices by $0.50 cwt. ($11/mt or $10/nt) to $29.25-$30.25 cwt. DDP loaded truck delivered to US border states. Although Mexican rebar has the advantage of shorter lead times, traders tell SteelOrbis that interest in Turkish product is just as strong.