As expected, US rebar market leader Nucor raised its May pricing significantly to reflect the major scrap price surge seen this month. With Nucor raising its rebar pricing for May by $147 /nt ($162 /mt or $7.35 cwt.), domestic rebar prices in the US now range from $44.70 cwt. to $45.25 cwt. ($985 /mt to $998 /mt or $894 /nt to $905 /nt) FOB mill.
Underlining the price increase, Nucor says that rather than waiting to enforce the increase until May 1, it will be effective immediately for all new orders.
Although the price hike is a major one, domestic producers had no choice but to raise their prices by the full extent of the scrap price increase. It remains to be seen whether customers will accept such a large price hike, but with new import offers still towering over domestic prices (even when including the May price increase), customers may not have much of a choice in the matter.
On the import side of the market, spot prices have risen significantly as the new offers from Turkish mills (the US' only major source for import rebars right now) are still out of this world, and the domestic price increase has given the import prices further momentum to rise. Also, inventories continue to be drawn down. Distributors say they still have some availability, but buyers in some locations say they are not able to get all of the tons that they need.
Most import rebar offers in the US now range from $43.00 cwt. to $44.00 cwt. ($948 /mt to $970 /nt or $860 /nt to $880 /nt) FOB loaded truck, in US Gulf ports. However, this price level is set to rise soon as new offers from mills to traders are closer to the $50.00 cwt. ($1,102 /mt or $1,000 /nt) level. Traders have not booked tons at Turkish mills' new asking levels yet, as they have been waiting for the US market to rise to the import price level. Currently, traders are not offering much material; they are waiting for the domestic price increase to take effect so they can sell their inventories at higher numbers.
License Data from the US Import Administration show that rebar imports in March showed a year-on-year decrease as well as a month-on-month decrease. The License Data showed 70,040 mt of total rebar imports in March, compared to 138,286 mt in February 2008 and compared to 199,136 mt in March 2007. The top import rebar sources in March 2008 were: Mexico, 54,390 mt; Japan, 9,234 mt; and Dominican Republic at 5,560 mt. Turkey, notably, was absent from the list of top importers in March, likely due to the country's sky-high offering prices in recent months.