In addition to last week's immediate base price increase, domestic rebar mills have taken the full scrap hike into account for January prices.
Late last week, before the official December scrap prices had been announced, Nucor released a $1.00 cwt. ($22/mt or $20/nt) base price increase for rebar, effective immediately. While the announcement made no mention of raw material surcharges (RMS), the prevailing expectation was for mills to announce yet another price increase this week.
Transaction prices indeed went up, but by more than originally anticipated. Early predictions for December shredded scrap pricing averaged out to around $30/long ton, but Monday's scrap announcement lifted shredded by $45/lt. Domestic mills have since responded with a $2.25 cwt. ($50/mt or $45/nt) RMS increase and no further action on base prices for January shipments.
In the meantime, the $1.00 cwt. base increase has already been fully absorbed in the market-spot prices are up this week, from $31.50 cwt. ($694/mt or $630/nt) ex-mill to a range of $32.00-$33.00 cwt. ($705-$728/mt or $640-$660/nt) ex-mill. However, prices in the lower end of the range are quickly drying up, and if rebar buyers try to buy ahead of the January increase, the most common spot transactions will likely move into the higher end of the range and beyond, inching ever-closer to current mill asking prices of $32.75-$33.25 cwt. ($722-$733/mt or $655-$665/nt) ex-mill.
As for import prices, Mexican mills have already reacted to Nucor's $1.00 cwt. increase by bumping their own base prices by the same amount. Mexican offers are now in the range of $29.75-$30.75 cwt. ($656-$678/mt or $595-$615/nt) duty paid FOB delivered to US border states, and the trend is expected to stay up through next month when the $2.25 cwt. US increase goes into effect.
Turkish mills, on the other hand, have not followed the US trend quite yet, even though their raw material costs are also up. For now, prices are still in the range of $31.25 to $32.25 cwt. ($689-$711/mt or $625-$645/nt) duty paid FOB loaded truck in US Gulf ports, but prices could move up as early as next week.