As expected, US rebar mills announced an increase in rebar prices this week, making room for import price increases as well.
After the $32/long ton ($1.43 cwt. or $29/nt) increase in shredded scrap pricing announced last week, industry insiders were certain that US mills would increase transaction prices for rebar by the full amount. However, Nucor Bar Mill Group announced a $1.60 cwt. ($35/mt or $32/nt) increase in their raw materials surcharge (RMS), plus a $0.35 cwt. ($8/mt or $7/nt) decrease in base prices, resulting in a $1.25 cwt. ($28/mt or $25/nt) increase in transaction pricing effective with shipments as of September 1. Other major mills will likely follow suit, despite the fact that the net move recoups slightly less than the full scrap increase. For now, domestic rebar offers have bumped up into the range of $30.75 cwt. to $31.25 cwt. ($678/mt to $689/mt or $615/nt to $625/nt) ex-mill, but customers may be able to still get product for previous prices-at least for the time being. There's already speculation that scrap will increase again in September-if that expectation becomes widespread, customers might be more willing to easily accept the higher price.
Earlier this week, Mexican mills boosted their export offers to the US in anticipation of the US mill increase, which wasn't announced until Wednesday. Current rebar offers from Mexico are now in the range of $27.50 cwt. to $28.50 cwt. ($606/mt to $628/mt or $550/nt to $570/nt) delivered to US border states, reflecting a $1.00 cwt. ($22/mt or $20/nt) increase from last week.
Overseas, Turkish mills, which have been raising prices locally for weeks, also saw an opportunity in the imminent US scrap increase and finally translated their own scrap increases into a $1.00 cwt. hike in import offers. However, the new price range of $29.00 cwt. to $30.00 cwt. ($639/mt to $661/mt or $580/nt to $600/nt) FOB duty-paid loaded truck in US Gulf ports is still unsellable at this point, being so close to US domestic prices.
Despite Turkey's recent pattern of maintaining narrow margins between import and US rebar prices, their standing as one of the top sources of imported rebar to the US is not likely to change. According to license data from the US Import Monitoring and Analysis System (SIMA),the US imported less rebar from Turkey in July (17,454 mt) compared to June (27,862 mt), but August levels (19,638 mt) have already surpassed July levels, and there is still three weeks left in the month.
Mexico was the number one source of imported rebar to the US in July, with 18,112 mt, an increase from June's level of 15,033 mt. Another notable source was Japan, whose 9,960 mt was the first reported tonnage in well over a year. Overall, the US imported 48,661 mt of rebar in July, a slight increase from June's level of 44,262 mt. August levels are already on the path to surpass July, with 34,998 mt reported as of August 11.
