Bolstered by their success at pushing through the full $1.25 cwt. ($28/mt or $25/nt) transaction price increase for April, strengthening demand levels and filling order books, US domestic rebar mills appear to have the leverage to keep spot prices firm in the face of lower scrap prices this month. In fact, after shredded scrap prices settled at a $20/lt decrease last week, Gerdau Long Steel North America announced a $0.50 cwt. ($11/mt or $10/nt) price increase, effective April 15. However, spot prices are not expected to rise by $0.50 cwt.--according to sources, the move was more of a statement to customers that they shouldn't even try to negotiate below the current spot range of $34.75-$35.75 cwt. ($766-$788/mt or $695-$715/nt) ex-mill. So far, no other mills have followed with an increase, although Nucor and others will most likely announce a sideways transaction price trend.
Despite US mills' bullish attitude toward domestic rebar prices, some sources believe the uptrend won't last, mainly due to an overhang of imports in the market. In addition to ample tonnages available at the ports, future order offers are still far below US domestic offerings. Rebar from Turkey is still being offered in the range of $29.50-$30.50 cwt. ($650-$672/mt or $590-$610/nt) DDP loaded truck in US Gulf ports--unchanged since last week--and Turkey's soft domestic rebar market indicates that prices could drop further in the near term. South of the border, Mexican mills have given up on the higher offers they imposed late last month, and have followed the US scrap trend downward--even though US domestic mills have not. Mexican rebar is now being offered for $30.50-$31.50 cwt. ($672-$694/mt or $610-$630/nt) DDP loaded truck delivered to US border states, reflecting an adjustment of $1.00 cwt. ($22/mt or $20/nt) from last week's range.