As each passing week over the last month predicted a larger and larger decrease in February scrap prices, US rebar mills' chances to hold onto their last announced increase diminished as well. By the time shredded scrap prices settled at a $25-$30/long ton drop (depending on region) this week, sources told SteelOrbis that mills would have no choice but to drop transaction prices by the full scrap decrease, even though they previously seemed reluctant to give up any of the $0.75 cwt. ($17/mt or $15/nt) gain for February shipments--which they had no problem pushing through. As would be expected, rebar buying activity has slowed this week, as customers anticipate much lower spot prices than the current range of $37.50-$38.50 cwt. ($827-$849/mt or $750-$770/nt) ex-mill.
Another factor that will likely influence US mills' decision on rebar pricing is the tremendous influx of imports flowing into the US. While tags on positions aren't significantly lower than current US domestic prices, the sheer number of options out there--with traders vying for market share--has US mills nervous. According to US import license data, an astonishing 151,153 mt of rebar arrived in the US in January (compared to 48,127 mt in December), and similar numbers are expected for February. Meanwhile, current offer prices from both Turkey and Mexico have dropped in the last week, reflecting the expected trend for US prices. Turkish offer prices are now in the range of $34.25-$35.25 cwt. ($755-$777/mt or $685-$705/nt) DDP loaded truck in US Gulf ports--down $0.75 cwt. since last week--while Mexican offers are now in the range of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck delivered to US border states, registering a heftier $2.00 cwt. ($22/mt or $20/nt) weekly drop.