As a result of further discounting from domestic mills eager to get orders, US rebar prices have dropped by another notch since last week.
Falling by approximately $1.00 cwt. ($22 /mt or $20 /nt) in the past week, competitive domestic rebar offers in the US now range from about $28.00 cwt. to $28.50 cwt. ($617 /mt to $628 /mt or $560 /nt to $570 /nt) ex-mill. These prices can be achieved if mills are presented with a decent-sized order, buyers say.
December is always a fairly quiet month in the rebar market, as the holidays and the cold weather prevent much construction activity or concrete pouring from taking place. This year, however, the usual seasonal slowness is exaggerated by the negative economic conditions and global financial crisis. Demand is very weak even for December, and customers are still generally not interested in replenishing their inventories given the current uncertain state of the economy.
While spot prices are definitely falling, an official price decrease from domestic mills in December is not too likely, as scrap prices have rebounded somewhat. A price increase would be out of the question though -- the up-tick in raw material prices will, at most, balance out a decrease in base prices.
On the import side, most offers have remained at the same range as last week, of $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) duty-paid, FOB loaded truck, in US Gulf ports. Very little import activity has taken place since last week due to the weak demand and Thanksgiving holiday. The pricing trend remains down, though, as Turkish mills are willing to cut prices in order to get some business.
Mexican offers for January deliveries are still at a high $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) at the border, and delivered to an inland destination for some large buyers; however, they are getting very little traction at this price level.
Despite the down-trending markets, Preliminary Census Data from the US Department of Commerce's Steel Import Monitoring and Analysis (SIMA) system show that, on the bright side, rebar imports to the US are decreasing. Final import rebar data for October show a total of 34,294 mt, compared to 52,870 mt in September and 55,408 mt in October 2007. Most import rebar in October came from Japan, at 16,430 mt; Mexico, at 15,289 mt; Dominican Republic, at 1,594 mt; Germany, at 526 mt; and Belgium, at 389 mt.
Census Data isn't available for November yet, but based on License Data, it looks like rebar import totals will show another month-on-month decrease. November License Data show rebar imports at only 20,687 mt.