US rebar market heats up despite cold weather

As announced earlier this week, Nucor has decided to raise rebar prices by $15 /nt ($0.75 cwt. or $16.50 /mt), and most market players agree that further price increases are on the way. Scrap prices have risen for the second month in a row and are likely to rise in March as well. Though Nucor chose not to pass on to customers the entire scrap increase, customers would nevertheless have accepted the whole $25 /nt increase, as business is surprisingly strong during these traditionally slow winter months. However, Nucor prefers to maintain pricing from month to month in order to prevent wild price fluctuations. Market players agree that the currently strong market is only going to get stronger as the weather warms up. The pricing trend is still slightly up. Domestic rebar prices for February shipments range from $27.40 cwt. to $27.90 cwt. ($604 /mt to $615 /mt or $548 /nt to $558 /nt). The usual price extras apply for smaller sizes and grade 60. The pricing trend for import rebar is now strongly up, as Turkish mills are already filling up for March shipments. There is tremendous demand from the Persian Gulf market, a major consumer of Turkish rebar. In addition, with the Euro still strong, the Turkish mills are happy to fill European orders. Since the Turkish mills are far from desperate for US orders and raw material costs are on the rise, US customers will eventually have to pay higher prices for Turkish rebar in order to refill their inventories. There is a limited amount of Asian imports coming in, particularly from Taiwan, Singapore and Malaysia, but these imports will probably fall short of covering US demand. As far as pricing goes, the ball is in the Turkish mills' court, and more increases are certainly on the way. Because of this surge of demand in the Middle East and Europe, import rebar offering prices for the US have also increased by $0.75 cwt. ($16.50 /mt or $15 /nt) in the past week. Offers now range from $26.25 cwt. to $27.25 cwt. ($579 /mt to $601 /mt or $525 /nt to $545 /nt) FOB loaded truck, in US Gulf ports. Year-to-date census data from the US Import Steel Monitor shows that from January through November 2006, the top rebar exporters to the US were: Turkey at 1,107,675 mt, Taiwan at 283,685 mt, Japan at 201,533 mt, Mexico at 115,509, and the Dominican Republic at 83,767 mt.