US rebar market – Import momentum has shifted

Although Nucor, the leading rebar producer in the US, did not raise rebar prices for August, the domestic market is still stable, and demand is still steady. Actually, the return of Nucor's stable price strategy last week came as a bit of a surprise, since the market is strong enough to raise base prices slightly. However, since scrap prices haven't moved since last month, it is obvious why the Raw Materials Surcharge hasn't gone up. Domestic rebar offers still range from $27.90 cwt. to $28.40 cwt. ($615 /mt to $626 /mt or $558 /nt to $568 /nt) ex mill. Usual price extras apply for smaller sizes. The pricing trend for domestic rebar is still slightly up, and it is possible that we might see a slight increase next month. The import rebar pricing trend, on the other hand, has moved from neutral to slightly down. As the Asian countries await the coming rainy season, mills are more interested in exporting. Turkish mills are also increasing their exports since their home market has cooled off some. The US is currently the main market for Turkish and Asian exports, so we will be receiving the majority of their exports, at increasingly competitive rates. Another factor influencing the import demand is the year-end tax issue. Any bookings made now will arrive towards the end of the year, and no one wants to accept large shipments in December as they will have to pay taxes on their inventories. These taxes are especially high in Houston, a main port for receiving steel shipments. Selling activity on the downstream level is still good; the problem is oversupply on the trader and distributor end, not lack of demand from fabricators and contractors. However, if the current crisis in the Middle East does not improve, this could also affect the US import market from the supply end. The Middle Eastern markets consume a lot of Turkish rebars, and buyers in this region are nervous and won't commit to large purchases until the hostilities end. This may create an additional interest for Turkish companies to ship to the North American markets. Even though we deemed the pricing trend slightly down, this week, prices for import rebar remain the same at a range of $27.25 cwt. to $28.25 cwt. ($601/mt to $623/mt or $545/nt to $565/nt) FOB loaded truck in US Gulf ports.