Import rebar offering prices for the US have risen another notch as Turkish numbers continue to soar on the back of skyrocketing scrap prices.
Since our last report, import rebar customers in the US saw offers rise approximately $0.75 cwt. ($16.50 /mt or $15 /nt) to a price level of $32.75 cwt. to $33.75 cwt. ($722 /mt to $744 /mt or $655 /nt to $675 /nt) FOB loaded truck, in Houston. This range is still far less than the new offer levels from Turkish mills, which are pushing $36.00 cwt. ($794 /mt or $720 /nt). There are still some traders' positions destined for the US Gulf, though the quantities are not significant.
Turkish offers still dominate the Gulf, and prices for these offers have risen sharply in recent weeks due to Turkey's rapidly strengthening scrap market.
Mexico is currently supplying some tonnage to the Texas market at numbers slightly cheaper than Turkish offers, but as usual, the reliability of these Mexican tons is questionable. Also, one Mexican mill has raised their price for 20-ft rebars by $1.00 cwt. ($22 /mt or $20 /nt), ahead of the expected elimination of the foreign fighter discount by Nucor.
On the West Coast, Japanese and Taiwanese offers are options, though Taiwanese rebar prices have become uncompetitive since Asian billet prices started to rise three months ago. With Chinese billet export prices increasing due to the latest export tax increase (from 15 percent to 25 percent), Taiwanese rebar prices are expected to continue their upward trend. Japanese rebars have the best available price, though the tonnage is limited and a few regular buyers snap up all available tonnage without much effort.
In general, tight supply will keep import rebar prices trending strongly up in the coming weeks.
As for the US' domestic rebar market, not much has changed in the past couple of weeks because of the holidays. There are still no indications of strong demand coming back, but inventories are low, and it is believed that people will be ready to buy after they return from vacation.
For now, most domestic offers continue to range from $32.15 cwt. to $32.65 cwt. ($709 /mt to $720 /mt or $643 /nt to $653 /nt) FOB mill.
Prices should stay at this range for the duration of the month, unless the foreign fighter discount for 20-ft rebars is rescinded, which would result in an overall price increase. There is a good chance that the discount will be retracted this month, since it is no longer necessary as import prices are trending steadily up.
Certain regional markets within the US are stronger than others due to supply issues. For example, the Florida market is becoming more active since inventories have been drawn down due to the lack of new supply. Imports have been virtually absent from the Florida market in recent months due to the high ocean freight rates, since the shipping lines do not want to stop in multiple ports. Many shippers are offering to Houston only for the US Gulf.
The pricing trend for the domestic rebar market as a whole is strongly up, due to low import inventories. Also, scrap prices are expected to bounce up significantly in the coming months, which should raise the raw materials surcharge for rebars.
Final census data from the US Import Administration show that year-to-date (YTD) through October, import rebar arrivals to the US totaled 1,577,462 mt, compared to 2,136,049 mt of rebar imported during the first ten months of 2006. YTD October 2007, the top import rebar sources were: Turkey, at 392,334 mt (down sharply from the 1,044,910 mt imported YTD October 2006); Taiwan, at 222,273 mt; Mexico, at 232,831 mt; Japan, at 138,428 mt; and Brazil, at 107,304 mt.