US rebar prices stabilize ahead of December scrap price hike

Both domestic and import offer prices in the US rebar market have halted their decline within the past week, as rising scrap prices have counteracted the price dampening effects of weak demand.

US rebar offers have remained since last week at a range of $21.75 cwt. to $22.25 cwt. ($480/mt to $491/mt or $435/nt to $445/nt) ex-mill. Depending on the extent of the December scrap increase, which is currently estimated to be about $45/long ton for shredded, US rebar producers may either keep prices steady for January, or raise them to reflect some or all of the increase to the raw materials surcharge.

Due to the ongoing weak demand, the more likely scenario for domestic rebar offers in January is that net prices will reflect only a small price hike, if any. Nevertheless, the anticipated size of the December scrap price jump is prohibitive of any further price decline on the rebar side for the time being. Therefore, the price trend for US domestic rebar offers has stabilized.

On the import side, Mexico remains the only viable source for rebar as Turkey remains priced out of the market. Import Mexican offers have also ceased falling since last week, as producers south of the border are also keen to take a cue from the scrap market trend and try to stop the bleeding.

Mexican rebar producers have already made some price increase announcements for the domestic market, and an increase in their offers for the US are sure to follow as soon as the US domestic producers' January price move becomes clear. For now, prices are still trending sideways as discounted material continues and it remains to be seen whether the market is ready to accept a price hike.

For now, most offers of import Mexican rebar for the US remain at a range of $20.75 cwt. to $21.75 cwt. ($457/mt to $480/mt or $415/nt to $435/nt) delivered to Texas.

Preliminary licensing data collected through December 1 show a sharp drop in US rebar import tonnage in November, as Turkish arrivals dried up completely during the month in question. License data show only 9,556 mt of rebar imports in November, with 8,238 mt coming from Mexico and most of the balance coming from the Dominican Republic (1,033 mt). This compares to October census data of 29,935 mt, which included 18,617 mt from Turkey, 9,439 mt from Mexico, and 1,500 mt from Dominican Republic. With Turkish rebar offers remaining uncompetitive, this should help further tighten US rebar supplies, leaving a larger market share for domestic and Mexican producers.