A price increase of $40 /nt to $60 /nt ($44 /mt to $66 /mt or $2.00 cwt. to $3.00 cwt.) is expected to be tacked on to rebar shipments from US mills in June due to the scrap price rally being seen this month.
Needless to say, traders are looking forward to the price hike, as it will help them to raise their import numbers, but fabricators are more than a little worried about another huge chunk being taken out of their margins.
Currently, most domestic offers continue to range from $44.70 cwt. to $45.25 cwt. ($985 /mt to $998 /mt or $894 /nt to $905 /nt) ex-mill. With an increase announcement expected from Nucor in the next few days, the domestic pricing trend for rebar is strongly up.
On the import side, with inventories slimming down and import offering prices continuing to increase, spot prices for import rebar in the US have moved up another notch in the last week.
Spot offers from traders and distributors are now taking place at the range of $48.00 cwt. to $49.00 cwt. ($1,058 /mt to $1,080 /mt or $960 /nt to $980 /nt) FOB loaded truck in US Gulf ports, representing an increase of $3.00 cwt. in the past week. And with asking prices from foreign mills still on the upswing and very few import tons scheduled to land on US shores anytime soon, the pricing trend for import rebar in the US, like the domestic pricing trend, remains strongly up.
As for new import rebar offerings from foreign mills, the US' main import rebar source, Turkey, has continued to raise their asking prices due to the rising scrap costs in the region, though US traders aren't jumping on these deals yet as they are so much higher than the amount that spot offers are currently going for in the US. This may change soon though, as distributor inventories are getting leaner from the lack of import arrivals, and because of the imminent domestic price increase.
There have been some scattered offers of Mexican rebar at a relatively good price of $49.00 cwt. to $50.00 cwt. ($1,080 /mt to $1,102 /mt or $980 /nt to $1,000 /nt) delivered to Houston, although these offers are very limited in quantity and rebar shipments from Mexican mills have a notorious reputation of being unreliable. There have also been some tons booked from Japan recently, but these offers are usually only available to a select small group of buyers.
With the weak dollar in combination with the strong foreign rebar markets in many parts of the world including the Middle East, Latin America, and Southeast Asia, it would seem that domestic mills might be doing a lot of exporting at this time; however, while there has been some increase in rebar exports since last year, the increase is a modest one. US mills are still using most of their rebar production to meet the domestic demand, which has increased strongly as competitive imports have disappeared.
Steel mill export data from the US Import Administration for February 2008 (the most recent data available) show US mill rebar exports of 35,320 mt (compared to 23,770 mt in February 2007), although 33,444 mt of these tons were sent to Canada. However, data from March, April and May should show some more modest increases in export activity.