Domestic rebar prices have reached the apex of their months-long uptrend, but the expected upcoming decline will not be very steep.
While the most likely scenario for February scrap prices continues to be a sideways trend, SteelOrbis has heard of rumors that shredded scrap could potentially drop by $30-$40/lt. If this happened, domestic rebar mills would probably react by lowering the raw materials surcharge but leaving base prices the same, a sign that the market is experiencing a slight correction rather than a significant downturn with long-lasting implications. Likewise, if scrap prices remain level, industry insiders expect mills to take the rebar base price down a notch.
Spot prices for US rebar stopped climbing last week, and this week they have remained steady in the range of $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) ex-mill. It appears that for the time being, domestic rebar prices have reached their peak, but any movement downward will probably not happen until after February scrap pricing is announced.
Turkish rebar prices are also steady for now-unlike wire rod prices, which Turkish producers pushed too far in the first place and are already on the decline. Current prices of $34.50-$35.50 cwt. ($761-$783/mt or $690-$710/nt) duty paid FOB loaded truck in US Gulf ports will most likely start to dip in the coming weeks, but there is not much impetus to be more competitive before then because US customers are not exactly flocking to import offers right now.
Mexican mills, on the other hand, have already started to backtrack with their offers. Typically, Mexican rebar price movements mirror US price movements, but this week, mills south of the border have taken a proactive approach and dropped official asking prices by about $1.75 cwt. ($39/mt or $35/nt). Offers for imported Mexican rebar are now in the range of $36.25-$37.25 cwt. ($799-$821/mt or $725-$745/nt) duty paid FOB delivered to US border states. SteelOrbis has not heard of any new spot prices, but considering that last week spot prices were around $36.00 cwt. ($794/mt or $720/nt), there is a good chance that deals are occurring slightly under the reported official range.