There is a good chance that scrap prices in the US will increase modestly this month, in which case domestic rebar producers will raise their prices in turn.
With the current tight market conditions in the US rebar market, if scrap goes up, mills will likely ask for the amount by which scrap goes up, and then some. The mills should have no problem getting customers to accept such an increase because domestic rebar is still bargain-priced compared to the current import offers.
For now, domestic rebars continue to range from $36.15 cwt. to $36.65 cwt. ($797 /mt to $808 /mt or $723 /nt to $733 /nt) FOB mill. The pricing trend is strongly up.
On the import side, prices for US customers have not gone up further in the last week, though the pricing trend remains strongly up. Traders are having some difficulty moving tons at their current offering price range of $37.50 cwt. to $38.50 cwt. ($827 /mt to $849 /mt or $750 /nt to $770 /nt) FOB, loaded truck, in US Gulf ports. However, traders continue hanging on to their unsold positions rather than lowering prices since the domestic pricing level is expected to increase, and import replacement costs continue to rise.
Some distributors have some cheaper materials that they received a few months ago and are selling at as low as $35.50 cwt. ($783 /mt or $710 /nt); they are still making a profit though because they purchased this material when prices were much lower. The big difference between the current rebar spot prices and the replacement prices for May/June is making some traders consider buying from distributors for their own inventories. The replacement costs from foreign mills are as high as $39.50 cwt. ($871 /mt or $790 /nt) and are trending upwards.
The import mills currently offering rebar to the US remain primarily Turkish. Taiwan is still mostly out of the market, since their home market is very robust, with prices in Asia rising almost daily. Mexico, another typical source of import rebar for the US, is also no longer offering significant amounts of tonnage to the US since their home market is also doing well. Although Mexico used to have a lot of bargain offers, Mexican mills are slowly raising their numbers to the level of other imports.