US rebar prices have registered a decent-sized increase in the last week, following domestic producers' February transaction price announcement.
As SteelOrbis reported last week, US rebar mills, led by Nucor, announced a net price hike for rebar totaling $60/nt ($66/mt or $3.00 cwt.) effective February 1. In addition to accounting for the $50/nt ($55/mt or $2.50 cwt.) increase to the RMS, this hike includes a $10/nt ($11/mt or $0.50 cwt.) increase in rebar base prices. And while mills have yet to collect this bullish increase in full, offers have moved up by approximately $40/nt ($44/mt or $2.00 cwt.) following the announcement.
Most domestic rebar offers now range from approximately $26.00 cwt. to $26.50 cwt. ($573/mt to $584/mt or $520/nt to $530/nt) ex-mill. The price trend remains up as mills are still trying to get the full increase, which would push offers above $27.00 cwt. ($595/mt or $540/nt).
Actual rebar demand in the US is still not strong, but inventories are still pretty low and domestic producers have been able to retain a good amount of the US market share due to the lack of competitive imports. Many customers are also seeking to fill holes in their inventories in anticipation of an up-tick in business this spring. For these reasons, US producers are enjoying moderate success in pushing through their increased raw material costs. However, buyers are still somewhat hesitant since the volatile scrap market has the main driver of rebar prices this year. If scrap starts to trend down again, then rebar prices will likely do the same.
Import rebar offers to the US are also rising due to scrap and the US domestic price increase. Mexican mills have raised their offers to a level of $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) delivered to US border states. This range is not competitive yet, but may attract some bookings if the US hike goes through in its entirety. Turkish offers are also still trending up, but new offers do not make sense for the US market. However, traders may be in the position to sell some previously purchased material at a range of $26.00 cwt. to $27.00 cwt. duty-paid, FOB loaded truck in US Gulf ports.