The $40 /nt ($44 /mt or $2.00 cwt.) June price increase announced by US rebar mills has been absorbed into the domestic market, with customers happily gobbling up whatever tons they can find, particularly in areas with very tight supplies like the Midwest.
Currently, most domestic rebar offers for June shipments range from approximately $46.70 cwt. to $47.25 cwt. ($1,030 /mt to $1,042 /mt or $934 /nt to $945 /nt) ex-mill. However, even after the domestic price increase for June, these prices are still lower than the numbers at which distributors and traders are selling their import inventories. With very little imports arriving this summer because of the high price expectations from foreign mills, and scrap prices expected to rise again in June due to the high international demand, it is very likely that we will see another significant domestic price hike for July. An international rebar trader recently told SteelOrbis, "In general, the market is pretty safe right now, somewhat immune to any flood of import offers. It's really the international market that's driving the price increases."
On the import side of the market, most distributors and traders are still selling their tons on the spot market at a range of $48.00 cwt. to $49.00 cwt. ($1,058 /mt to $1,080 /mt or $960 /nt to $980 /nt) FOB loaded truck in US Gulf ports. Distributors say that certain sizes are more available than others, with #4s being plentiful, and #6s and #3s being hard to find. Small bars like #3s are especially hard to find, and are going for as high as $55.00 cwt. ($1,213 /mt or $1,100 /nt) in the Midwest.
As for new import offers from foreign mills, there is very little material available. Turkish offers are still at unreasonably high levels for traders to commit to, as they would be close to the level of $60.00 cwt. ($1,323 /mt or $1,200 /nt) FOB loaded truck in US Gulf ports. Turkish offers have remained more or less stable in the last week, but it is unlikely that they will start to come down anytime soon, since they are achieving these prices from other markets, like the UAE.
Mills in Mexico, however, are offering some more reasonably priced material to the Texas market, though the quantities are not great. New offers from Mexico are set to rise to $50.00 cwt. to $51.00 cwt. ($1,102 /mt to $1,124 /mt or $1,000 /nt to $1,020 /nt) delivered to Texas, though there are still some old offers that can be found at a range of $48.00 cwt. to $49.00 cwt. delivered to Texas.
Looking forward, demand is expected to be fairly good in the third quarter, and the market should stay tight due to the lack of import supply. Domestic availability, while not as tight as that for wire rod, is not very plentiful either because of the increased demand from distributors that normally stock more import material. Therefore, the market is expected to remain very strong for at least the duration of the summer.