The US rebar market remains relatively uneventful as there have not been price changes in either the domestic and import markets since last week. However, US scrap prices are expected to go up this month, which may lead US rebar mills to try to increase their offering prices.
Most US domestic rebar offers have remained stable since last week at the level of $24.00 cwt. to $24.50 cwt. ($529 /mt to $540 /mt or $480 /nt to $490 /nt) FOB mill. As no change in prices has been recorded in the last couple weeks and no considerable changes in demand have been noted, the main activity occurring in the US rebar market is continued inventory de-stocking. An increasing number of market players are reporting low inventory levels, indicating that while consumption may be steady, supplies are shrinking as little new material is being purchased.
However, again, low inventory levels do not necessarily signal an improvement in demand or buyer mentality, so many dealers do not believe a price hike could occur in the next few weeks. The recent price stability occurring in the US rebar market is explained by some as mills taking a stand to stop price decreases despite the continued weak demand. And with scrap prices expected to increase by a modest amount this month, mills may take the opportunity to take an even firmer stance, possibly announcing the first net price increase for rebars in some time. Still, this does not mean that buyers would accept such an increase. But due to the upward pressure from scrap, dwindling inventories, and the price stability seen in the last several weeks, the pricing trend for domestic rebar has shifted from slightly down to neutral.
The trading activity with US’ main rebar import source, Turkey, remains diminished as Turkish producers and traders have focused on serving other foreign markets with greater demand than the US. Despite the lack of interest from US customers, Turkish mills are not lowering their prices for the US yet, with most offers continuing to range from about $23.50 cwt to $24.50 cwt ($518 /mt to $540 /mt or $470 /nt to $490 /nt) duty-paid, FOB loaded truck in US Gulf ports. Nevertheless, the Turkish import trend has also shifted to neutral, from slightly up, as the lack of activity between Turkey and the US and the poor economic conditions continue favoring domestic sales over import.
Mexican rebar offers for the US have also remained stable since last week, although it was heard that some Mexican firms recently tried raising their prices by about $1.00 cwt. ($22 /mt or $20 /nt). However, this price increase was not accepted on a wide scale, and most offers continue to range from about $21.50 cwt. to $22.50 cwt. ($474 /mt to $496 /mt or $430 /nt to $450 /nt) loaded truck in Houston. Traders comment, though, that there are not an abundance of Mexican offers and only one producer remains active with competitive offers. Despite the slightly better market conditions in Mexico than in the US, Mexican rebar import prices are also projected to continue to trend sideways, mimicking the US trend, as Mexican mills are still reliant on getting at least some US sales.
In recent news regarding import rebar, the US Department of Commerce published the preliminary results of its administrative review of the antidumping order against Turkish rebar Wednesday. The review originally covered seven Turkish companies, including: Ekinciler, Kaptan, Ege Celik, Habas, Izmir, Kroman, and Nursan. The DOC has preliminary calculted dumping margins of 0.35 percent for Ekinciler and 7.55 percent for Kaptan. The order against Habas was previously rescinded by the DOC, effective April 1, 2007. Regarding the other four Turkish companies, the DOC preliminarily decided to rescind the reviews of these companies because they had no exports of rebar to the US during the period of review, which is April 1, 2007 through March 25, 2008. The DOC will issue its final results for this review in September 2009.