Chilean rebar producers hike prices, though slow demand persists

After starting to recuperate at the end of June, Chile's domestic rebar market has continued its upward trend through the second week of September.

About two months ago, rebar prices in the domestic Chilean market ceased their downward trend and bottomed out. In early July, the local price stood at about US$800 to $815/mt delivered, including taxes. Since then, prices have risen steadily, with Chilean rebar mills now asking for approximately US$850/mt delivered, including taxes, following the latest price increase announcement made by the largest Chilean steel producer, CAP, on September 9.

Distributors comment that Chile's domestic rebar prices are relatively high as there are only two rebar producers in the country (CAP and Gerdau) and few imports. However, large customers are reportedly sometimes able to get moderate discounts. The trend for Chile's domestic rebar market continues to be slightly upward as inventories are low and demand is expected to show some improvements in the second half of the year. But as of now, even though demand has improved in the last couple months, it is still weak when compared to year-ago levels, as the construction sector continues to slump under the weight of the global financial crisis. Some market players believe that prices will start to trend down again by year-end due to the lackluster demand and the mills' rising production levels.