Although shredded scrap pricing did not bump up as much as anticipated, it's still enough to motivate US rebar mills to raise prices as well.
Speculation for September shredded scrap pricing was thought to be in the range of $30-$50/long ton, but early this week the official numbers came in slightly under. The modest $28/lt increase will likely result in a similar increase in transaction prices for US rebar, with many in the industry predicting a slight hike of at least $1.00 cwt. ($22/mt or $20/nt).
Despite domestic mills' reluctance to absorb rising raw material costs, demand is still weak and many mills do not want to have bulked-up stock going into the fall/winter months. Within the last week, mills have been trying to lighten their inventories by offering deals in the range of $0.50-$1.00 cwt. ($11-$22/mt or $10-$20/nt). Because the "actual" prices are slightly less than the "official" prices, mills might add any announced increase onto the spot price, which, as a result, would become more in line with the current mill offer range of $30.75-$31.25 cwt. ($678-$689/mt or $615-$625/nt) ex-mill.
Import rebar offers are also trending up. The Turkish scrap situation turned around in the last week, bolstering price increases for rebar of approximately $1.00 cwt. However, no one in the states is biting, considering that the hike brings prices dangerously close to domestic prices. Currently, Turkish rebar is being offered for $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) FOB duty-paid loaded truck in US Gulf ports.
Mexican mills, on the other hand, are biding their time to see exactly what US mills do, although there is a strong expectation that they will follow the domestic lead. For now, offers of Mexican rebar are about the same as last week, in the range of $28.50-$29.50 cwt. ($628-$650/mt or $570-$590/nt) delivered to US border states, with a few spot offers heard at about $0.50 cwt. less.
As with other long products, import rebar pricing dipped in June, resulting in a flurry of buying that is reflected in current import statistics. According to license data from the US Import Monitoring and Analysis System (SIMA), the US imported 70,103 mt of rebar in August, a significant increase from the 43,995 mt imported in July (preliminary census data) and the highest level in over a year. Mexico was the top source of imported rebar in August, with 34,853 mt, followed by Turkey with 33,859 mt. The only other notable source was Dominican Republic, with 1,226 mt.
