Following the $30/nt ($33/mt or $1.50 cwt.) drop in US domestic rebar prices announced by most Nucor mills last week, import rebar offers to the US have started to decline as well.
Rebar offers from Mexico have declined by about $0.25 cwt. ($5.50/mt or $5/nt) since last week, with most offers now ranging from $22.75 cwt. to $23.50 cwt. ($502/mt to $518/mt or $455/nt to $470/nt) delivered to Houston. However, traders say these offers still need to be at least $1.00 cwt. ($22/mt or $20/nt) cheaper in order to attract any orders.
Turkish rebar offers for the US, meanwhile, have also dropped by approximately $0.25 cwt. since last week, with most offers now ranging from $24.75 cwt. to $25.75 cwt. ($546/mt to $568/mt or $495/nt to $515/nt) duty-paid, FOB loaded truck in US Gulf ports. So far Turkish longs mills have been attempting to hold prices firm recently despite the weak demand and falling scrap and billet prices, but their current offers obviously still have a long way to come down until they will be competitive with US domestic and Mexican import offers. Turkish offers are expected to eventually succumb to the downward trend before long, and start approaching the current US domestic price level.
Even with import offers slinking downwards, import volumes are still generally expected to continue to remain low through at least year-end, as domestic mills are usually willing to compete with any attractive import offer and can also offer smaller and quicker deliveries. Nucor Trading's managing director Michael Setterdahl commented, in his presentation given at the SteelOrbis Fall 2009 Conference and 61st IREPAS Meeting held in Dubai this week that total US import rebar volumes in 2009 are expected to be about half of the amount imported in 2008, which means 2009 volumes will be only a quarter of their 2007 annual total. Setterdahl also noted that in 2009, Mexico is expected to continue to maintain its status of top rebar exporter to the US in 2009, which it usurped from Turkey in 2008.
On the domestic side, not much has changed since last week, with most offers East of the Rockies remaining at a range of approximately $23.00 cwt. to $23.50 cwt. ($507/mt to $518/mt or $460/nt to $470/nt) following Nucor's $1.50 cwt. October 13 net price decrease on rebar (which excludes the firm's Seattle, Washington, and Plymouth, Utah mills, which have adjusted base prices to hold transaction prices steady during the period). Domestic offers on the West Coast remain at least $1.00 cwt. above Midwest prices.
Even after the October decrease, the pricing trend for US domestic rebar remains down as demand is expected to remain lackluster, at best, as winter approaches, and scrap prices are expected to continue their descent into November.