US domestic rebar offering prices, on average; have come down by about $1.00 cwt. ($22 /mt or $20 /nt) in the past week due to Nucor reinstating the "foreign fighter" discount for 20-foot rebars.
As SteelOrbis announced earlier this week, Nucor mills announced that effective immediately, 20' rebars in sizes 3 to 6, Grades 40 and 60, will be discounted by $20 /nt to $40 /nt, depending on the area. These rebars will be discounted by $40 /nt in the southern locations like Birmingham, Alabama and Jewett, Texas, $30 /nt in mid-western locations like Kankakee, Illinois and Marion, Ohio, and $20 /nt in the western locations like Seattle, Washington and Plymouth, Utah.
Due to the decreases for 20' rebar, on the whole, domestic rebar prices have decreased by $1.00 since last week, with most offers now ranging from $30.90 to $31.40 ($681 /mt to $692 /mt or $618 /nt to $628 /nt) FOB mill.
Despite the slight up-ticks in the scrap market this week, the pricing trend for domestic rebar is still slightly down because of the slow demand. Plus, by lowering domestic prices, as Nucor did for the commonly imported 20' rebars, domestic producers can gain a competitive advantage over the lower priced imports. In September, the most likely scenario is that the domestic mills will officially keep prices stable, but some discounts and special deals for certain customers will continue to take place.
Import rebar offering prices have remained stable in the last week, with most offers still ranging from $29.50 cwt. to $30.50 cwt. ($650 /mt to $672 /mt or $590 /nt to $610 /nt) FOB loaded truck, in US Gulf ports.
The pricing trend for import rebar also remains slightly down as most market sources don't think prices have bottomed out yet. Still, there are some positive signs in the market that indicate that the downward trend may soon come to an end. While the European market is asleep, with most mills and traders on summer vacation, the Middle Eastern market is starting to bounce back. In response to the growing demand in their home market and from the Middle East, Turkish rebar mills are now offering at higher levels. However, these prices are too high to gain any interest from the US thus far.
Rebar traders in the US still have high inventories and are willing to cut prices in order to move tonnage. Sources say that rebar demand is better than wire rod demand, but in general, the market is still weak.
The current de-stocking of rebar inventories should eventually help the market as supplies will be low by the time demand bounces back again. Also, there aren't expected to be much more imports coming in for the remainder of the year. Ramadan begins late September this year, which means that the Middle Eastern market will slow down sooner than usual. Also, imports are typically slow during the fourth quarter, especially in Houston due to the inventory tax issues.
Data from the US Import Administration show that year-to-date (through the end of July), rebar imports to the US totaled 1,317,295 mt, compared to a total of 1,464,800 mt for the same period of the previous year. YTD July 2007, the most rebar tonnage came from the following countries (YTD): Turkey, at 334,246 mt, Taiwan, at 279,180 mt; Japan, at 163,618 mt; Mexico, at 158,204 mt; and Brazil, at 81,331 mt.