US rebar market – Import prices still rally in record territory

Import rebar offers in the US have increased by $0.50 cwt. ($11 /mt or $10 /nt) since last week, against a backdrop of relentless soaring in the foreign rebar markets. Most import rebar offers now range from $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 /mt or $580 /nt to $600 /nt) duty paid, FOB loaded truck, in US Gulf ports. Similar prices are valid for West Coast discharge from Asian sources, primarily from Taiwan. East Coast destinations are particularly problematic at the current time because the markets there were primarily serviced by Turkish mills. However, Turkish mills are very reluctant to sell to destinations out of their freight comfort zone, i.e. to Gulf destinations. The offers at the higher end of the pricing spectrum are coming from Turkey; however, US customers are not yet willing to pay these higher numbers. The Turkish mills are not hungry for US bookings though, since the other markets that they sell to (Turkish domestic, Persian Gulf, southern Europe) are paying higher prices. Also, the Turkish mills are putting unprecedented size restrictions, especially for 20 footers. Under normal circumstances, the US import market requires about 70 to 80 percent 20 foot rebars. Despite size restrictions and high prices, US customers will soon have to buy imports since inventories are starting to run out for second quarter arrivals. Traders report that there is not much rebar inventory on the ground in the US and that Turkish mills are still not offering much tonnage to the US. A few small shipments are on their way from Turkey. However, the amount involved is significantly short of the normal import quantities around this time of the year. As for the domestic market, rebar prices for March delivery range from $28.90 cwt. to $29.40 cwt. ($637 /mt to $648 /mt or $578 /nt to $588 /nt) ex-mill. The domestic rebar market is getting stronger, with non-residential and even some residential construction starting to bounce back in some parts of the country. Market players say that 2007 probably will not be a fantastic year for consumption, but that it will still be decent. Rising raw material costs and rising import prices should keep domestic rebar prices headed in an upward direction for the next few months.