The pricing trend for import rebar offers to the US remains slightly down, though inventories are slim and prices aren't expected to fall in a significant way.
Earlier this year, many cargoes were fixed with severe restrictions for 20-foot and #3 rebars. As those cargoes are now trickling in, buyers report that #3 rebars and 20 footers are becoming hard to find in the spot market. Holes in inventories may be a sign that import rebar prices are coming closer to bottoming out.
Still, there are many negative indications. The scrap market in Turkey, the US' largest import rebar source, is soft, and the European rebar market has cooled off and is no longer accepting the higher-priced rebar offers from Turkey. Also, June and July will deliver quite a few unsold tons to the market, and inventory hangover will keep prices from rising for at least another few months.
As we mentioned last week, a large amount of unsold positions are arriving this month and the next, though spot market activity is picking up with deals being struck at around the $30.00 cwt. ($728 /mt or $660 /nt) level in the Gulf region. The spot buying activity has continued this week, with people buying anything they can at this pricing level. Future buying activity remains slow for the time being.
Aside from the $30.00 cwt. spot deals, most import rebar offers on the market (for future positions) still range from $30.25 cwt. to $31.25 cwt. ($667 /mt to $689 /mt or $605 /nt to $625 /nt) FOB loaded truck, in US Gulf ports. Foreign mills don't appear to be desperate for business, and so far there is no deep discounting for rebar offers.
Preliminary license data from the US Import Administration show that rebar imports to the US from June 1 through June 26 totaled 226,800 mt, the highest monthly total this year. Year to date (through June 26), rebar imports to the US totaled 1,061,400 mt, compared to the 1,273,300 mt imported from January through June 2006. Preliminary census data show that the top import rebar sources for the US in May 2007 were: Turkey at 58,027 mt, Taiwan at 51,162 mt, and Japan at 25,774 mt.
The pricing trend for US domestic rebar remains slightly down, though there do not appear to be any major price decreases in sight due to the relatively stable scrap market. However, it is possible that prices could come down slightly in August due to the slow demand and temporary import surge in June and July.
At least, as one trader told SteelOrbis this week, the rebar market is "not as bad as wire rod or flat rolled products."
US domestic prices continue to range from $31.90 cwt. to $32.40 cwt. ($703 /mt to $714 /mt or $638 /nt to $648 /nt) FOB mill.