With very little import rebar tonnage arriving at US ports this month, the $25 /nt increase announced by US rebar mills for January shipments is expected to meet market acceptance.
Factoring in the $25 /nt ($28 /mt or $1.25 cwt.) increase, domestic rebar offers for January shipments range from $32.15 cwt. to $32.65 cwt. ($709 /mt to $720 /mt or $643 /nt to $653 /nt) FOB mill.
In addition to this price increase, domestic mills are expected to terminate the $20 /nt to $40 /nt ($1.00 cwt. to $2.00 cwt. or $22 /mt to $44 /mt) "foreign fighter" discount for 20-ft. rebars, possibly by the end of the year. This has not been officially announced yet, however.
Meanwhile, import offering prices have risen by approximately $0.50 cwt. ($11 /mt or $10 /nt) in the past week, with most offers now ranging from $32.00 cwt. to $33.00 cwt. ($705 /mt to $728 /mt or $640 /nt to $660 /nt) FOB loaded truck, in Houston for February/March deliveries. Facing significant increases and low inventories, distributors are interested in booking some import tonnage again.
On the trader level, however, virtually no purchases have taken place yet at these higher prices, though traders are raising their prices in anticipation of further price increases from Turkey. Turkey has achieved high prices in the Middle East, and their scrap prices have been rising to record territory. The majority of the import offers available are from Turkish mills, which would like to raise their prices beyond $700 /mt CFR FO in the Gulf (approximately $33 cwt. FOB loaded truck in Houston) as their customers in Dubai are paying than these prices on a net return to mill basis.
Final census data from the US Import Administration show that rebar import arrivals continue to be down, year-on-year, though Mexico, Taiwan, and Brazil have been more active in the US import market this year than in 2006.
The data show that from January through October 2007, the US imported a total of 1,577,462 mt of rebar, compared to 2,136,049 mt imported during the same period of 2006. Top import suppliers year-to-date October 2007 were: Turkey, at 392,334 mt (compared to 1,044,910 mt YTD October 2006); Taiwan, at 333,273 mt (compared to 275,848 mt in the prior period); Mexico, at 232,831 mt (compared to 91,533 mt); Japan, at 138,428 mt (compared to 196,937 mt); and Brazil, at 107,304 mt (compared to 66,285 mt).
There is currently some Mexican presence in the market, though their prices are also going up, and the velocity of the price movement makes many buyers worried that Mexican mills may not perform at the booking prices.
Asian mills are still absent from the Gulf market in general.