US rebar market – Import mills and domestic customers still at standstill

While domestic rebar prices have not changed in the last week, the recent drop in auto bundle prices has market watchers wondering if shredded scrap prices will go down as well. This has the effect of making it hard for domestic rebar producers to maintain their prices. In reality, it is unlikely that we will see a large drop in scrap prices, as they did not plummet last month in line with the drop in auto bundle prices. The decrease in shredded prices for next month will most likely be only moderate; therefore, long product prices should only decrease slightly, if at all. More than likely Nucor will keep things stable for now. On the whole, domestic rebar prices still range from $27.40 cwt. to $27.90 cwt. ($604 /mt to $615 /mt or $548 /nt to $558 /nt) ex mill. Usual price extras apply for smaller sizes and grade 60. Completed transaction prices for import rebar have not changed since last week, though import mills in Turkey and Taiwan are asking for more money from US customers. The Turkish scrap market is pretty firm, and will most likely continue to strengthen as Black Sea scrap availability drops in November and December when the ports typically freeze over. Billet and freight prices in the Black Sea region are also on the rise. Despite the strength of the import rebar offers, US customers are not making any purchases at these higher prices. However, buyers will eventually have to refill their inventories, and it is very likely that they will start buying at these higher prices within the next couple months. Completed import rebar transactions still range from $26.00 cwt. to $27.00 cwt. ($573 /mt to $595 /mt or $520 /nt to $540 /nt) FOB loaded truck, in US Gulf ports. Preliminary census data from the US Steel Import Monitor show that in the month of August, 2006, the countries which exported the most rebar to the US were: Turkey at 103,190 mt, Brazil at 28,387 mt, Japan at 22,466 mt, Bulgaria at 14,530 mt, and Egypt at 10,016 mt. Very few transactions have been recorded for the next few months, and we expect the imports to slow down significantly for November and December arrivals.