After holding steady for several weeks, both domestic spot prices and import offers have softened in the US rebar market.
Attributed to a decrease in domestic demand, spot prices for US rebar have softened slightly in the last week, with most transactions occurring on the low end of the $35.00-$36.00 cwt. ($772-$794/mt or $700-$720/nt) ex-mill range. As for official asking prices, mills have adjusted their range downward to approximately $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) ex-mill, and there is already speculation that regardless of how shredded scrap prices move in March (current predictions are leaning more toward a sideways than a slightly down trend), there's a slight chance that mills might cut base prices to more accurately reflect what the domestic market is willing to pay.
Import offers have experienced a similar weakening, with Turkish mills also lowering their prices to the US. Both CFR prices and sales prices in the US have ticked down about $0.50 cwt. ($11/mt or $10/nt) in the last week, bringing offers into the range of $34.50-$35.50 cwt. ($761-$782/mt or $690-$710/nt) duty paid FOB loaded truck in US Gulf ports. SteelOrbis has learned that Turkish mills are somewhat pliable with their price ranges, but nevertheless, there is still not much transaction activity at current levels, especially considering how much Turkish prices are being undercut by Mexican offers.
In reaction to the US market's downtrend, Mexican mills have become quite competitive with their rebar offers. While prices were reported as low as $35.00 cwt. ($772/mt or $700/nt) last week, most transactions are now reported in the range of $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) duty paid FOB delivered to US border states. Furthermore, as noted in last week's report, Mexican mills are still very flexible with their offers, and prices below the above range are not entirely out of the realm of possibility.
Aside from a reactionary move to the US market, some speculate that Mexican mills are accepting such low prices because they have too much inventory on their hands, while another theory posits that after being virtually shut out of the wire rod market in the US (due to recent trade legislation issues), Mexican mills that produce both wire rod and rebar and looking to make up for the loss by boosting their market share in the rebar sector.