US scrap prices are on the rise (a $10 to $20 /long ton increase is expected for September); however, it is unlikely that rebar producers will increase prices accordingly.
The consensus in the market seems to be that Nucor and other domestic mills will keep prices stable for October shipments, lowering base prices by the same amount that the raw material surcharge will increase.
Rebar demand is still rather soft for this time of year, but the increasing scrap prices should allow rebar mills to prevent any price slippage for a while.
For now and through the month of September, most domestic rebar offers will continue to range from $30.90 cwt. to $31.40 cwt. ($681 /mt to $692 /mt or $618 /nt to $628 /nt) FOB mill.
On the import side, despite the slow business and the high inventories on the ground that still need to be digested, there are no indications that the main import rebar suppliers will lower their prices anytime soon.
The lower-priced Mexican offers still abound, but the major suppliers to the US, i.e. Turkey and Taiwan, are both expected to raise their prices for the US soon. There is unlikely to be any acceptance at these higher numbers, but the producers in Turkey and Taiwan do not seem to be too concerned. With the relatively strong rebar markets worldwide, including Europe, the Middle East, and even China, it is apparent that the global rebar markets do not rely heavily on sales to the US anymore.
For now, most import rebar offers still range from $29.50 cwt. to $30.50 cwt. ($650 /mt to $672 /mt or $590 /nt to $610 /nt) FOB loaded truck, in US Gulf ports.
Data from the US Import Administration show that in August, rebar imports in the US totaled 107,147, down from 224,980 in July and down from 191,431 mt in August 2006. The top import rebar suppliers in August 2007 were Taiwan (55,945 mt), Mexico (28,610 mt), Japan (6,194 mt), and Turkey (a meager 4,243 mt). With price gap between domestic and import non-existent, the downward trend in quantities should continue until the end of year.