Domestic rebar prices are set to remain at the current levels for March, but for the following month, despite the downward trending scrap prices, rebar may see a price increase.
US rebar prices are far behind international levels, and this is causing some upward momentum in the domestic market. Supply is tight, and imports are minimal, so domestic mills have the ball in their court. Demand for rebar is okay at best, although it is stronger than that for wire rod, and wire rod mills are passing on price increases left and right. Domestic rebar mills can easily warrant a price increase, and buyers are thinking one may be coming for April.
Scrap price expectations are teetering between stable and slightly down for the month ahead. If scrap prices remain flat or rise slightly, rebar producers may wind up upping their prices to keep up with market conditions. If scrap prices slip in the upcoming month, it may make it a little harder for rebar mills to pass along increases that are not directly related to raw material costs, though this remains a possibility. Distributor inventories are low, tons are tight, and the market is approaching its busy season.
Current domestic rebar prices 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 domestic pricing trend is up as an increase in the near future is foreseeable.
On the import side, traders are waiting for either domestic numbers to go up or for some spot shortages to start to appear in the market before selling their unsold tonnage. Given the rates at which traders bought their imported material, they need to sell at $38.00 cwt. ($838 /mt or $760 /nt) or higher to make any profit. So for now, traders are holding on to those unsold positions.
Import rebar offers to the US are still at the levels reported last week. Mill prices are slightly up, but freight rates have come down slightly, offsetting the increase to customers.
Import rebar offers for US customers are still ranging from $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.
According to license data from the US Import Administration, US rebar import tonnage totaled 118,362 in January 2008. The top three exporters to the US were Turkey with 58,211 mt, Mexico with 42,277 mt, and Dominican Republic with 5,841 mt.