Both domestic and import prices in the US rebar market have remained stable since last week, though the softness in demand and raw materials continues.
After dropping in the week following US market leader Nucor's $30/nt ($33/mt or $1.50 cwt.) net price drop (excluding its mills in the Western US) made earlier this month, US domestic rebar offers declined to a level of $23.00 cwt. to $23.50 cwt. ($507/mt to $518/mt or $460/nt to $470/nt) ex-mill. Although prices have not weakened further since falling to this range, there is a chance that they may drop again next month if US scrap prices decline again in November, as expected.
With demand remaining weak and likely to weaken further in the winter months, raw material costs softening and import offers declining as well, the price trend for the US domestic rebar market is slightly down going into November.
At the same time, US rebar inventories remain on the lean side and with economic conditions slowly but surely improving (Commerce Department figures released Thursday showed that the US GDP grew by 3.5 percent in the third quarter),no significant price drops are expected for US rebar November or December, with business potentially looking up again by early next spring as delayed private construction projects are restarted and more stimulus-funded government infrastructure projects commence.
Import rebar offers from Mexico continue to range from about $22.75 cwt. to $23.50 cwt. ($502/mt to $518/mt or $455/nt to $470/nt) delivered to Houston, though, as mentioned last week, these offers will likely have to decline further in order to get any US bookings since they are only slightly under the US domestic price.
Offers from Turkey are also unchanged since last week, and continue to mostly range from $24.75 cwt. to $25.75 cwt. ($546/mt to $568/mt or $495/nt to $515/nt) duty-paid, FOB loaded truck in US Gulf ports. duty-paid, loaded truck in US Gulf ports, though this sales price is somewhat irrelevant since it is not competitive compared to US domestic or import Mexican offers, and no bookings are taking place.
Turkish longs mills continue to see very weak demand, both domestically and in their export markets, particularly on the rebar side. Nevertheless, scrap and billet prices offers to the region are above the producers' price expectations and they are therefore reluctant to lower their finished longs prices too precipitously. Still, if Turkish mills want to get any US bookings, they will have to lower their offers accordingly.
The latest import data from the US DOC demonstrate the continued lack of import rebar presence in the US. Preliminary census data from September show that the US imported only 14,612 mt of rebar in the month, compared to 21,436 mt in August and year-ago September rebar imports of 52,870 mt. The latest import license data collected through October 27 indicate a slight rise in October - to 25,556 mt. However, this number is still under the year-ago level October level of 34,200 mt and well under the 2008 monthly average of 73,300 mt.