US rebar – Improved outlook for domestic and import markets

The pricing trend for import rebar offers to the US has turned around, as the market in Turkey - the major import rebar source for the US - sees a sharp rebound. With scrap and billet prices moving up in Turkey's domestic market, the Turkish rebar market has turned around quickly and is now robust. Turkish rebar mills are starting to withdraw from the US market, waiting for the US to accept higher prices. Turkish offering prices have increased since last week, raising the average import rebar price by approximately $0.25 cwt. ($5.50 /mt or $5 /nt). Most import rebar offers now range $24.75 cwt. to $25.75 cwt. ($546 /mt to $568 /mt or $495 /nt to $515 /nt) FOB loaded truck, in US Gulf ports. The pricing trend for import rebar is now slightly up. Pessimists may say that the only reason for the turn around in Turkish prices is the extraordinary local demand fueled by the continuing good weather in Turkey. However, we still have a lot of winter ahead of us; the weather will inevitably take a turn for the worse, and the good local demand may disappear quickly. Nevertheless, optimists will say that the higher Turkish prices might eventually be accepted by the Middle East and European markets, boosting weak world prices. Time will tell if the Turkish rebar market will maintain its strength, and if so, how this will affect the rest of the world market. For now, the signals from the rest of the world, including the US market, remain weak. Preliminary license data from the US Steel Import Monitor shows that during the month of November, the following countries exported the most rebar to the US: Turkey at 71,742 mt, Mexico at 23,940 mt, Taiwan at 18,264 mt, Hong Kong at 9,444 mt, and Japan at 4,614 mt. The outlook on the domestic rebar market has also improved since last week, though the improvement is solely raw materials-driven. Now that shredded scrap prices are starting to trend up again, the pricing trend for domestic rebar is neutral. If scrap prices had stayed neutral or decreased this month, Nucor would have had a hard time keeping rebar prices stable for another month. However, shredded scrap prices are up approximately $10 /long ton since last month. Rebar sales are still slow, but the higher scrap prices will allow Nucor and other domestic rebar producers to keep pricing stable for another month, decreasing base prices by the same amount by which the raw material surcharge increases. Nucor's pricing announcement for bar products should be announced within the next several days. For at least the rest of December, domestic rebar prices will continue to range from $26.65 cwt. to $27.15 cwt. ($588 /mt to $599 /mt or $533 /nt to $543 /nt) ex-mill. The usual price extras apply for smaller sizes and grade 60. Not included in this pricing policy are certain import markets, such as Texas, where some domestic mills are matching import offers for certain customers.