Since Nucor's announcement that it will raise rebar prices by $147 /nt for May shipments, other US mills have quickly followed suit, and there is now very little doubt that this major price increase will be accepted by the market.
With import offers being much higher-priced than domestic material for so long, the new domestic price range of $44.70 cwt. to $45.25 cwt. ($985 /mt to $998 /mt or $894 /nt to $905 /nt) FOB mill is expected to be widely accepted. Although end-demand is not fabulous, the warming weather will bring more construction projects in the US, and with very little imports coming in, the domestic market should remain tight.
It is too soon to tell whether domestic prices will stay flat or rise in June, as this is largely affected by the often volatile scrap prices. In light of the tight market situation, however, any weakening for rebar prices in the near future is very unlikely. Therefore, the overall pricing trend for domestic rebar prices in the US is slightly up.
On the import side, as of last week, traders have been withholding offers in preparation for raising their prices. With domestic prices rising, traders want to increase their numbers as well. However, some distributors are still selling at as low as the high $30's cwt. as of last week, making it harder for traders to raise their prices just yet. The low-priced distributor offers are expected to sell out quickly though, allowing the market level to rise. The majority of import rebar offers continue to range from $43.00 cwt. to $44.00 cwt. ($948 /mt to $970 /mt or $860 /nt to $880 /nt) FOB loaded truck, in US Gulf ports.
For the first time in a long time, it may be possible to purchase imports at slightly less than the domestic price level, as there is a wide gap between the prices that import rebars are being sold at on the ground and the pricing that Turkish mills, the US' primary import source, are asking for. Traders confirm that they are not yet buying at the asked-for $50.00 cwt. ($1,102 /mt or $1,000 /nt) level, and some believe that the import market may be close to peaking.
Demand from Dubai's market has cooled off some recently, and customers in Dubai are now asking for numbers slightly below the level that Turkish mills are asking for. With the Middle East market having a much more influential impact on the world rebar prices than the US market has these days, demand in that region may ultimately determine the import price trend for the US. For now, the import pricing trend is still slightly up, as traders will have to purchase material at above the cost price for their existing inventories, if not at the $50.00 cwt. level.
The US' other traditional import rebar source, Mexico, remains largely absent from the US import market except for in the regions close to the US-Mexico border, as Mexican mills are busy meeting demand from their growing domestic market as well as from the Latin American market.