US scrap prices have increased significantly more than anticipated for April, which is expected to show in domestic rebar prices for May shipments.
Market sources have told SteelOrbis that April scrap deals in the US are being concluded at levels up approximately $150 to $170 /long ton from March prices, matching the price increases seen for industrial scrap bundles in April. With raw material costs increasing by such a large amount, there is no doubt that Nucor, the industry leader, will push a decent amount of this increase onto customers for May orders.
Currently, domestic rebar prices are still below the levels seen for imported material. However, with this recent scrap price increase, domestic mills may take this opportunity to really hike up their prices, especially since import prices have not finished their upward rally either.
Through April, domestic rebar prices will continue to range from $37.35 cwt. to $37.90 cwt. ($823 /mt to $836 /mt or $747 /nt to $758 /nt) FOB mill. The pricing trend remains strongly up as the industry awaits the May pricing announcement.
On the import side, distributors still have plenty of inventories, and there are plenty of trader tons which were booked at lower price levels still on their way to the US. These old inventories on the ground will be cleared out soon, however, and once they are, new import offers are expected to be up significantly, at close to the $50.00 cwt. ($1,102 /mt or $1,000 /nt) level.
Current spot market import prices are still at the same level as last week, ranging from $38.50 cwt. to $39.50 cwt. ($849 /mt to $870 /mt or $770 /nt to $790 /nt) FOB, loaded truck, in US Gulf ports, though the pricing trend is strongly up.
Trying to make sense of the market, many rebar traders are in attendance at the IREPAS and SteelOrbis joint meeting being held in Istanbul over the next few days. Steel industry professionals from all over the world will be in attendance to discuss the current market conditions on a global scale from raw materials, to trading, steel futures, and the outlook for the remainder of 2008.