While many sources were on the fence last week about the prospects of another US domestic rebar price increase (which would be the third in less than two months), expectations are once again rising for an imminent price hike. Mills might not have the leverage for an increase based on September’s sideways scrap trend, sources say, but two other market factors will “almost ensure” mills make an announcement shortly.
The first is a global graphite electrode shortage that is driving up EAF steelmaking input costs. Already, the shortage has been cited as the primary reason behind this week’s $2.00 cwt. ($40/nt or $44/mt) price increase for US domestic wire rod.
The second market factor is the narrow gap between most import rebar offers and US domestic rebar prices, which sources say typically encourages US mills to widen the gap with a price increase. Compounding the situation is the dwindling supply of positions at US ports—recent import permit data show only 31,586 mt of rebar imports so far in September (as of Sept. 19), with nearly 90 percent of that total coming from “new” sources including Italy and Brazil—Turkey shows zero import permit tonnages for the month. Without competition from lower-priced import positions, US rebar mills have an extra incentive to raise prices.
As such, the current US domestic rebar spot range of $33.25-$34.75 cwt. ($665-$695/nt or $733-$766/mt) ex-mill might not last much longer. Expectations for a price range amount vary, with some sources pegging it as low as $1.25 cwt. ($25/nt or $28/mt) and others guessing as high as $2.50 cwt. ($50/nt or $55/mt).