After the Turkish longs mills' price hikes that took place earlier this month failed to attract any orders, the pricing trend for import rebar in the US has quickly reversed.
Turkish mills have rescinded their recent price increase for rebar, and traders in the US have lowered their offering prices as well. Import rebar offers have dipped by approximately $2.00 cwt. in the last week to a range of $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) duty-paid, FOB loaded truck, in US Gulf ports.
Mexican mills, however, have not yet lowered their prices for the US and are still resisting business at below their offered range of $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) at the border, and delivered to an inland destination for some large buyers, for January deliveries. Most Mexican mills have extended their holiday shutdown period and claim to be full through the end of the year, so they are not desperate for orders.
Generally, though, import rebar prices are once again trending down, as the underlying weak demand rendered the Turkish price hikes unsuccessful. Traders and distributors tell SteelOrbis that inventories are low, but demand is even lower. Fabricators also confirm that business is off. With the general economic picture still looking pretty bleak, prices are expected to continue trending slightly down in the short term.
Customers are developing some holes in their inventories for certain sizes, but as one distributor told SteelOrbis this week, "They don't mind." Because it is essentially a "buyer's market" right now, customers are able to demand next-day deliveries when they run out of material, and have no incentive to build inventories until prices have clearly bottomed out. Quick, reliable service has become essential in this weak, uncertain market.
On the domestic side of the market, no further price decreases have been officially announced since Nucor's $180/nt price cut earlier this month, but as a result of discounting and special deals, the domestic rebar price has dropped by approximately $1.75 cwt. ($39 /mt or $35 /nt) in the last week to a range of $29.00 cwt. to $29.50 cwt.($639 /mt to $650 /nt or $580 /nt to $590 /nt) ex-mill.
For now, however, the domestic price trend for rebar is stable. US scrap prices are expected to register a modest increase in December, and while it is unlikely that domestic mills will reflect the increase in their transaction prices, it will probably prevent another large price decrease from taking place. Provided that shredded scrap prices rise above Nucor's RMS Program Baseline of $162/nt, as is expected, producers would likely reduce base prices by the same amount that the RMS increases, making for stable transaction prices in December.