Some Mexican rebar mills that had been offering to the US at lower than other imports have been running out of tons and raising their prices. As a result, most of the import rebar offers from Mexico to the US are now not priced very far below other imports.
The disappearance of the extremely low Mexican offers from the market will help both domestic and import numbers to maintain their strength.
The other main competitor in the import rebar market right now, Turkey, is still experiencing soft market conditions; however, producers are not willing to drop prices in a significant way. Turkish domestic billet and rebar prices softened significantly in the last couple of weeks due to Ramadan, which is traditionally the slowest time of the year. Turkish offering prices in the US have trended slightly down in the upcoming weeks, though they are still on the high side compared to Mexican offers and are not low enough compared to domestic prices. Another factor that is keeping Turkish offers in the US is the freight rates from the Black Sea region, which are at an all-time high.
Meanwhile, offers from Taiwan are now absolutely out of the picture, as these prices continue to rally upward, far above other import offerings. The entire Far East is experiencing a billet and long products rally and looks very strong.
At the current time, import buyers in the US still aren't ready to make big purchases as there are still a lot of unsold tons sitting at the ports, and distributors' inventories are still on the high side. However, high inventories are not expected to be a long-term problem as there will be very few import arrivals for the remainder of the year. Demand is slow but not dead, and ports are still shipping out truckloads everyday.
Most import rebar offers have remained steady since last week, continuing to range from $29.25 cwt. to $30.25 cwt. ($644 /mt to $667 /mt or $585 /nt to $605 /nt) FOB loaded truck, in US Gulf ports.
Data from the US Import Administration show that during the first eight months of the year, the top import rebar shippers to the US were: Taiwan (328,817 mt), Turkey (326,775 mt), and Mexico (186,395 mt). While more Taiwanese material than Turkish material arrived during this period, data for the coming months should reflect a slowdown in Taiwanese arrivals due to the skyrocketing Taiwanese prices and high Asian freight rates. Overall, import quantities for the second half of this year will be significantly less than first half of 2007.
As for domestic rebar prices, no drops in pricing are foreseen for the duration of the year due to the lack of new import arrivals as well as the stable scrap pricing. There could possibly be another slight increase in scrap prices in the following two months, and if so, domestic mills may even raise their rebar prices slightly for November or December deliveries. If scrap prices are stable this month, rebar prices should remain stable as well.
For now and for the month of October, domestic rebar prices range from $30.90 cwt. to $31.40 cwt. ($681 /mt to $692 /mt or $618 /nt to $628 /nt) FOB mill.