Michael Setterdahl of Nucor Trading: New tendencies in North American rebar market

In his presentation at the SteelOrbis Fall '09 Conference and 61st IREPAS Meeting, Michael Setterdahl, managing director of Nucor Trading, gave an overview of the situation in the US rebar market, outlining new tendencies seen in the market in question. He started by saying that the total volume of the US rebar market was approximately ten million net tons per year from 2004 through 2008, while the estimation for 2009 is 5.68 million net tons. Surprisingly, the percentage represented by highways, streets and bridges has been fairly constant each year at 36 to 39 percent of the total market, in the current year also. There are many people in construction who are wondering where the infrastructure work has gone.
 
Regarding imports into the US, the figure in 2007 was 1.6 million nt, while in 2008 it stood at was 864,000 nt, with imports nearly halved year on year despite the fairly good market. Meanwhile, in the first nine months of 2009, imported rebars reached 313,000 nt, with the import figure for the whole of 2009 expected to end up being around half the figure for 2008.
 
Another important point is that, starting in 2008, Mexico has replaced Turkey as the largest import rebar source and that has carried over into the smaller market of 2009 (first nine months), when Mexico had almost 50 percent of the market with 150,000 nt, with Turkey at 133,000 nt.
 
Mr. Setterdahl stated that there has been one major change in the North America rebar markets: almost all domestic rebar producing mills are now fully focused on the production of number 3 rebar size and higher. Up until 2007, the largest import size was always # 3. On the other hand, production capacity has also gone up domestically. He went on to say that the US rebar market seems to be split between the West Coast and the Gulf/East Coast, while the West Coast is controlled by Mexico - no longer by Japan, South Korea or Taiwan - and it seems that there is no Chinese rebar entering the US due to the antidumping measure in place.
 
In conclusion, Mr. Setterdahl said that imports of rebars into the US and Canada will continue to decline over the coming years due to the relatively low value of the dollar and the adequate supplies from domestic producers. Large projects from 2008 are being concluded in 2009 and it seems that there are still questions hanging over the financing of new projects. Mr. Setterdahl added that Canada is still the largest destination for Nucor Trading's rebar exports from the US. The company's rebar exports in 2007 came to 355,000 nt, with Canada accounting for 55 percent of the total; in 2008 its rebar exports stood at 700,000 nt with 82 percent going to Canada; and, finally, in the first eight months of 2009 Nucor Trading's rebar exports amounted to 270,000 with 35 percent going to Canada.