With US shredded scrap prices dropping by upwards of $30/long ton this month, there is a very good chance that US rebar prices will fall right along with them.
Although US longs leader Nucor often opts to keep transaction prices for longs stable by raising base prices when raw material costs drop, given the ongoing weak demand in the US rebar market, it is quite likely that this time, domestic mills will lower rebar prices in step with the decreases in scrap.
An announcement from Nucor on March longs prices is expected any day now (though the price will be effective immediately if prices are lowered), and rebar numbers are expected to fall by at least $1.50 cwt. ($33 /mt or $30 /nt).
For now, most US rebar offers range from approximately $27.00 cwt. to $27.50 cwt. FOB mill ($595 /mt to $606 /mt or $540 /nt to $550 /nt); however, the pricing trend for domestic rebar is down due to the imminent price decrease. Furthermore, although it is common, $27.00 cwt. is hardly the bottom price. There are also still better deals for large tonnage that are already being conducted at below $27.00 cwt. FOB mill, especially with mill-affiliated rebar fabricators.
Meanwhile, import rebar prices are also trending slightly down, though there has been no noticeable change in prices offered from traders this week compared to last week. After declining by about $1.00 cwt. ($22 /mt or $20 /nt) last week, most offers for Turkish material continue to range from $23.50 cwt. to $24.50 cwt. ($518 /mt to $540 /mt or $470 /nt to $490 /nt) duty-paid, FOB loaded truck in US Gulf ports, while Mexican offers, which also dropped by about $1.00 cwt. last week, still range from $24.50 cwt. to $25.50 cwt. ($540 /mt to $562 /mt or $490 /nt to $510 /nt) loaded truck in Houston. The overall pricing trend for import rebar is also slightly down.
Mexican mills are more reluctant to lower their prices and are reportedly "stalling" the implementation of any price decreases. Meanwhile, Turkish mills are still pretty hungry for business and they are seeing falling scrap costs as well. However, if US prices do come down another notch as expected, Mexican rebar imports, along with imports from other sources, will most likely come down by at least as much in order to stay competitive with US material.