US rebar prices have dropped further in the last week as the weak domestic demand and even weaker international demand continue to take their toll on the market.
Due to continued price slashing from foreign mills in efforts to attract US business, import spot offers have declined by approximately $3.00 cwt. ($66 /mt or $60 /nt) in the last week, with most offers now ranging from $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 /mt or $580 /nt to $600 /nt) duty-paid, FOB loaded truck, in US Gulf ports. Offers from Mexican mills are at the same range, delivered to Houston.
The pricing trend for import rebar remains strongly down as the international markets are weakening even faster than the US market, and mills are desperate to get business. One US longs trader told SteelOrbis this week, "There's the perception that the US market is not as bad as in Europe and the Middle East, so everyone is trying to sell here."
Things continue to get worse in the market of one of the US' major import rebar sources, Turkey. Many Turkish re-rollers have already closed due to the abysmal demand, while the mills have high scrap inventories and are taking sizable losses. Since the mills cannot fill their backlog for immediate rolling, some are cutting production or may be forced to halt production temporarily.
The market of the US' other major import rebar source, Mexico, is also weaker than that of the US, traders say, and Mexican mills are reportedly very negotiable with their prices. With their prompt deliveries and lower offers, these Mexican offers are also creating downward pressure on the domestic prices.
Although no official announcements have been made since domestic mills lowered prices by $130/nt ($143 /mt or $6.50 cwt.) earlier this month, domestic rebar spot prices have weakened further in the last week, buyers say, to a range of approximately $37.50 cwt. to $38.00 cwt. ($827 /mt to $838 /mt or $750 /nt to $760 /nt) ex-mill. With the steep import competition and soft demand along with the falling scrap prices (shredded scrap is down $45/long ton since Nucor's last published price decrease), mills have had no choice but to lower their numbers accordingly. And with no good news on the economic front, the market does not appear to have reached its bottom yet.