With US scrap prices expected to trend strongly up in April, US rebar prices are expected to travel upwards as well.
Not only are raw material costs rising, but the lack of competitively priced import rebars is also contributing to the general tightness in the US rebar market. Based on these factors, it is believed that US rebar mills could hike prices significantly for May deliveries, perhaps even by more than the anticipated scrap price increases.
Through April, domestic rebar prices will continue to range from $37.35 cwt. to $37.90 cwt. ($823 /mt to $836 /mt or $747 /nt to $758 /nt) FOB mill. The pricing trend remains strongly up.
On the import side, distributors still have plenty of inventories, and there are plenty of trader tons which were booked at lower price levels still on their way to the US. Slowly but surely, the market is moving up, and new spot prices have gone up approximately $1.00 cwt. since last week to a new range of $38.50 cwt. to $39.50 cwt. ($849 /mt to $870 /mt or $770 /nt to $790 /nt) FOB, loaded truck, in US Gulf ports.
Once these lower-priced inventories clean out, however, based on the new offers from the main import source, Turkey, prices will be close to an astonishing $50 cwt. ($1,102 /mt or $1,000 /nt) level. Turkey is still the only country offering rebar to the US in a major way, and Turkish price expectations continue to rise along with their strengthening domestic scrap market and strong demand from the Middle East market. No new orders at this high level have been fixed yet or are even close to being concluded because the domestic price and spot prices are significantly lower than the new import level. Domestically, it is said that while availability is still good, mills are now reluctant to supply more than the usual amount of tonnage to their customers. So, both domestic and import prices are expected to jump up significantly in the coming weeks.
Mexican mills have typically been a pretty significant source of lower-priced import rebars for the US, but they are currently out of the US market due to their busy home market. If they do return to the market, their numbers would be strongly up from the bargain price levels they were offering a few months ago.
Recently released Preliminary Census Data from the US Import Administration show that in February the US' import rebar market continued to be dominated by Turkey and Mexico. US rebar imports from all countries for the month in question totaled 108,264 mt (compared to 161,489 mt in February 2007), with most imports coming from Mexico, at 51,315 mt; and Turkey, at 50,769 mt. Smaller sources of import rebar in February were the Dominican Republic, at 4,695 mt; Canada, at 773.1 mt; and Germany, at 671.1 mt.