With US shredded scrap prices climbing $35 to $40 /long ton this month and a lack of import rebar arrivals to the country, it is certain that Nucor and other domestic rebar producers will raise their prices for August shipments by at least as much as the raw material price hike.
At $49.00 cwt. to $49.50 cwt. ($1,080 /mt to $1,091 /mt or $980 /nt to $990 /nt) ex-mill for July shipments, domestic rebar prices are still well under import prices. Most market players believe that domestic mills will continue to raise their prices slowly every month until they match the import price levels.
Although US rebar consumption is not great, there are very little imports, so mills are very busy and business is tight. For August and beyond, the pricing trend for domestic rebar is strongly up, with an increase potentially as high as $60 /nt ($66 /mt or $3.00 cwt.) expected for Nucor's next price announcement.
Meanwhile, traders continue to offer their import rebars at a range of $52.00 cwt. to $54.00 cwt.($1,146 /mt to $1,191 /mt or $1,040 /nt to $1,080 /nt) FOB loaded truck in US Gulf ports; however, traders report that they are not selling much at these numbers and are waiting for the next domestic price increase, which should make the $52 to $54 cwt. range look a lot more attractive to customers.
Mexican mills are reportedly not selling much either at their offered range of $54.00 cwt. to $55.00 cwt. ($1,191 /mt to $1,213 /mt or $1,080 /nt to $1,100 /nt) delivered to the Gulf and are scaling back their numbers somewhat, offering some discounts for large customers. Like traders, the Mexican mills are also waiting for the US mills to increase their numbers so that their offers are more reasonable in comparison.
As far as new import offers go, other than Mexico, the only source with offers that are somewhat workable is Japan, and there has been some speculative buying taking place from Japan in recent weeks. The reason why Japan is able to offer somewhat competitively is that they have access to some lower-priced scrap, and their domestic construction market is very weak. Japanese prices are trending up, however, and there is not a lot of availability. Japanese mills are OK with producing a lot of the smaller sized bars, but they do not have a lot of tons available for export, which makes it harder to ship orders (shipping cost can be as high as $120 /mt).
As for other typical import rebar sources, Turkey is still entirely out of the market, as their offers are completely unworkable; sales prices for Turkish materials would price out at over $70.00 cwt. in the Gulf (if any material was being purchased, and it is not). Taiwan, also another traditional import rebar source for the US in the past, has expanded its moratorium for billets and rebars, and is now out until the end of September.