US
rebar prices registered a major drop this week as domestic mills slashed prices to reflect a big drop in raw material costs.
Rather than offsetting the $130/nt ($143 /mt or $6.50 cwt.) raw material surcharge (RMS) drop by raising base prices,
Nucor kept base prices for
rebar stable, resulting in a net decrease in transaction prices of $130/nt, effective immediately. This move reflects the weakness of the
rebar market, as the company tempered the RMS drop by raising base prices for merchant bars, wide flange
beams and plates, resulting in a more moderate $80/nt decrease for those products.
Taking into account the October 13 price decrease, most domestic
rebar offers now range from approximately $39.75 cwt. to $40.25 cwt. ($876 /mt to $887 /mt or $795 /nt to $805 /nt) ex-mill.
The pricing trend for domestic
rebar is still down. Although
Nucor said it lowered prices to reflect the "bottoming out of the
scrap market" it cannot be said with certainty that
scrap prices actually bottomed out - In fact, shredded
scrap prices have already slid another $20/long ton since
Nucor's price announcement came out. It is possible that
scrap prices could start to rebound by the end of the year, but there is still a likelihood that
scrap prices could drop further, meaning that
rebar prices may see more price decreases before year-end as well.
In addition to the weakness in
scrap, some import
rebar is still being offered to the US at very competitive numbers, particularly from
Mexico.
Most spot prices for import
rebar range from approximately $36.00 cwt. to $38.00 cwt. ($794 /mt to $838 /mt or $720 /nt to $760/nt) duty-paid, FOB loaded truck, in US Gulf ports. Mexican imports range from $36.00 cwt. to $38.00 cwt. delivered to Houston.
Even at these low numbers, the market remains at a standstill. Customers are not interested in buying right now because they suspect prices will fall further. On the positive side, however, import offering prices have not trended further down this week compared to last week, as traders realize that slashing prices further will not help them to get orders.
In general, there are very few traders offering right now, as sales are not expected to pick up until it becomes evident that the market has definitively bottomed out.