Import rebar offers to the US are now trending slightly downward as the domestic and export markets of the US' main import rebar sources – Turkey and Mexico – continue to be weak. US domestic rebar demand remains soft as well, with no major up-ticks on the horizon.
While import rebar offers from Turkey and Mexico have not softened further since last week, the price trend is slightly down, with Turkish offers in particular expected to weaken over the next couple of weeks.
With no return of Turkey's export or domestic demand taking place following the conclusion of Ramadan at the end of September, Turkish mills are having difficulties filling their order books and have reportedly become more negotiable on pricing. Still, US traders aren't booking many Turkish tons since the lack of demand makes it difficult to put together enough orders to get good offers from the mills or competitive freight rates. Most import offers for Turkish rebar still range from approximately $26.00 cwt. to $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) duty-paid, FOB loaded truck in US Gulf ports, though this range is expected to soften somewhat in the coming weeks.
Meanwhile, Mexican rebar offers to the US remain at a range of $23.50 cwt. to $24.50 cwt. ($518/mt to $540/mt or $470/nt to $490/nt) delivered to Texas, though most offers are at the lower end of this range. Mexico's domestic market continues to be very weak so there is a strong likelihood that these offers may decline somewhat this month as well.
On the US domestic side, conditions for rebar aren't much better. Much of the optimism seen in August after there were some promising signs that things were improving has since evaporated, and companies are now hunkering down in expectations of a very slow winter season. Furthermore, the US scrap price drop this month is putting downward pressure on rebar prices as well. Producers may try to keep rebar prices stable despite the scrap price drop, though with demand remaining very weak and import prices trending down as well, mills may opt to lower prices for November shipments. This move probably depends in part on just how much US shredded scrap prices drop in October – after dropping by $15 to $20/long ton in the first week of October, there are expectations that scrap will show further losses throughout the month. US rebar mills will likely wait to announce their November price decision until total amount of the scrap price drop for October is clear.
For now, most domestic rebar offers continue to range from approximately $24.50 cwt. to $25.00 cwt. ($540/mt to $550/mt or $490/nt to $500/nt) ex-mill, although distributors say that most offers are now under $25.00 cwt., and that mill-affiliated fabricators get even better deals. This makes it particularly difficult for fabricators that aren't mill-affiliated to compete in the market. The overall price trend for domestic rebar is neutral though it may shift downwards later in the month depending on the October scrap movement.
On the bright side, inventories in the US rebar market generally remain low because of the lack of import arrivals this year, and this has prevented prices from softening much in recent months despite the continued weak demand. Also, construction demand for rebar is expected to slowly start ramping up again by spring of next year. But until then, it will likely be a very cold winter for the US rebar market indeed.