Import rebar offers for the US have decreased by approximately $0.25 cwt. ($5.50 /mt or $5 /nt) in the past week as the import market continues to trend down.
Most import rebar offers on the market now range from $30.25 cwt. to $31.25 cwt. ($667 /mt to $689 /mt or $605 /nt to $625 /nt) FOB loaded truck, in US Gulf ports.
Sales activity in the import rebar market is deadly quiet since traders don't want to resume purchasing until they get rid of their unsold inventories. Also, traders have a lot of material arriving from Turkey in June and July, which they are trying to resell at a low margin, at prices around $1.00 cwt. below their replacement costs. There is very little material currently on the ground, but demand is so slow that no one is running out of tons yet.
Meanwhile, several Mexican mills are offering very aggressively to the US, despite there being little to no takers. Mexico is not the largest player in the import rebar market, so their aggressive offers are not indicative of any major price decay in the rebar market. These low-priced Mexican offers are likely to be short-lived and will disappear once these mills' excess tonnage is sold. As we mentioned in our last report, the Turkish rebar market is starting to level off, and also, despite some softening in the Asian longs markets, Asian rebar mills are not all that empty and are not desperate for US orders. Import prices should continue to trend down in small increments over the coming weeks before leveling off.
Preliminary license data from the US Import Administration show that from January through May 2007, the top five import rebar sources for the US were: Turkey at approximately 214,900 mt, Taiwan at 136,900 mt, Mexico at 110,200 mt, Japan at 78,600 mt, and Brazil at 71,000 mt.
Domestically, prices have not changed in the last week, and although prices are still trending slightly down due to weak demand, indications are that shredded scrap prices will either remain stable or rise slightly in July, which should take some of the pressure off domestic mills to lower prices. If domestic mills do decide to lower prices for July shipments in order to compete with imports, the decrease will only be slight.
This week, domestic rebar prices continue to range from $31.90 cwt. to $32.40 cwt. ($703 /mt to $714 /mt or $638 /nt to $648 /nt) FOB mill.