Import rebar offers in the US have risen another $1.00 cwt. ($22 /mt or $20 /nt) in the past week, and traders are hoping that they can raise these numbers even further to make up for their costs.
New import rebar offers for US customers now range from $37.50 cwt. to $38.50 cwt. ($827 /mt to $849 /mt or $750 /nt to $770 /nt) FOB, loaded truck, in US Gulf ports.
Traders have sold all of their cheaper positions that were purchased when costs were lower, so they are no longer able to make any money if they sell at less than $37.50 cwt. What's left is the newer transactions booked at a higher pricing level. The buyers, however, aren't rushing to make purchases at these higher prices, perhaps because they have not been convinced that domestic prices will go up in March. Traders will have to hold on to those positions until the domestic prices pick up some more.
Despite some sales difficulties, the import pricing trend is still strongly up, as the current price level for US customers still does not reflect the newer offering prices from Turkish mills.
There aren't expected to be too many new purchases from Turkish mills this week or next week because of the unsold positions that still need to be digested, though this could change quickly, depending on US domestic pricing and availability.
Currently, the outlook for US domestic pricing is that it will stay flat in March since scrap costs moved down slightly this month, and mills will likely lower their raw materials surcharge, raising their base prices in turn to make for a flat transaction price. There is a possibility though that domestic mills could raise their transaction prices based purely on the current tightness in the market, as distributors' inventories are running low from the lack of imports. It is more likely, however, that an increase will be announced next month rather than this month.
Even if domestic prices do not rise this month, the overall domestic trend ought to be strongly up for the coming several months, because even at this newly increased level, rebar prices in the US are quite lower than their international counterparts. This means that price competition from imports is virtually nonexistent, and if mills stick to their current low prices, they would be leaving a lot of money on the table.
For February shipments, domestic prices continue to range from $36.15 cwt. to $36.65 cwt. ($797 /mt to $808/mt or $723 /nt to $733 /nt) FOB mill.