Although rebar prices are still relatively negotiable, October's expected scrap situation has the potential to firm up offers from domestic mills.
If shredded scrap follows the current consensus and comes down by $20/long ton next month, there is a good chance that domestic rebar mills will offset the decrease by an increase in base prices, keeping transaction prices level. However, there are rumors just starting to surface that scrap prices will dip even further, by as much as $40/lt. If that's the case, mills might not be able to firm up their prices and bring much-needed stability to the market. What actually happens with scrap in October is largely dependent on exports, namely to Turkey. Turkey's scrap purchases have been lackluster since the Ramadan holiday, and if they do not resume activity soon, scrap will likely dip into the deep end of the range. However, if they do re-enter the market, as some think they will, rebar prices might have a chance to stabilize as a result.
For now, asking prices for domestic rebar are still in the range of $31.75-$32.25 cwt. ($700-$711/mt or $635-$645/nt) ex-mill, with spot offers around $0.50-$1.00 cwt. ($11-$22/mt or $10-$20/nt) less.
Import offers have also not changed since last week, with Turkish offers still priced out of the market and Mexican mills waiting to see how their price increase idea sticks.
Although rebar prices have dropped somewhat in Turkey, the decrease has not yet translated to offers in the US. With the uncertainty in the US market, many domestic buyers do not want to bring in rebar in the winter, when end-use activity typically slows. Therefore, offers for Turkish rebar are the same from last week, in the range of $30.00-$31.00 cwt. ($661-$683/mt or $600-$620/nt) FOB duty-paid loaded truck in US Gulf ports.
After upping import prices by about $1.00 cwt. last week (albeit without an official announcement), Mexican mills are waiting to see how well it sticks. If the US scrap situation results in a slight dip in shredded scrap pricing and US mills are able to firm up prices accordingly, current Mexican offers of $29.50-$30.50 cwt. ($650-$672/mt or $590-$610/nt) duty paid FOB delivered to US border states might have a much better chance in the market. For now, however, there are not too many offers being booked south of the border.