Import rebar prices continue to rise, but more traders and distributors are becoming anxious to sell their inventories, even at a loss, in order to avoid the year-end inventory tax in Houston.
Due to the scarcity of competitively priced imports available, there are very few bookings for new import offers taking place, and this will remain the case until domestic prices start to rise again. For first quarter buying, domestic rebars are, for a change, the material of choice for distributors in the US.
The Turkish mills are still the only game in town when it comes to imports, and they are not discounting offers to the US anymore due to their higher raw material costs. They would rather cut production or sell to other markets without the dumping risk if they need to. With the high ocean freight rates and the unfavorable exchange rate with the US dollar, it makes little sense to sell rebars to the US market under the current conditions.
For now, most new import offers for US buyers continue to range from $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 mt or $580 /nt to $600 nt) FOB loaded truck, in US Gulf ports for January and February deliveries. The higher asking prices from Turkish mills have not yet been reflected in pricing for customers, as traders are not purchasing those offers and have not raised their prices for customers yet.
In other news that will affect the import landscape, the US Department of Commerce decided last week to revoke the antidumping duty order with respect to rebar imports from Turkish mills Colakoglu and Diler. This order will not have much of an impact on the import situation yet, since due to the aforementioned reasons, it is not profitable for them to sell to the US right now. Also, they are hesitant to offer too much tonnage to the US since there is always the possibility that they could be filed against again.
While rebar imports have slowed down drastically in the last several months, year-to-date rebar imports are not that far behind last year's figures. Final census data from the US Import Administration show that from January through August 2007 the annual total quantity of rebar import arrivals to the US was 1,407,390 mt, compared to a total of 1,656,633 mt for the same period of last year. The disparity between import rebar totals in '07 compared to those of '06 is expected to widen, however, as September through December data is taken into account.
Based on the final census data, the main import rebar sources this year through August were: Turkey, at 338,501 mt (compared to 804,637 mt in '06); Taiwan, at 313,632 mt (compared to 213,217 mt in '06); Mexico, at 182,880 mt (compared to 76,918 mt in '06); Japan, at 129,319 mt (compared to 186,535 mt in '06); and Brazil, at 103,128 mt (compared to 50,865 mt in '06).
On the domestic side, prices continue to trend sideways, and buyers say that the market conditions have not changed since last week. Domestic rebar prices will continue to range from $30.90 cwt. to $31.40 cwt. ($681 /mt to $692 /mt or $618 /nt to $628 /nt) FOB mill through November and likely through December as well. Shredded scrap prices decreased some this month, but with import competition out of the way, domestic mills should be able to raise base prices, counteracting the decrease in the raw material surcharge for December shipments in order to keep pricing stable through the end of the year.