US rebar market – Import prices drop another notch

As a result of weakening demand and high inventories, import rebar prices have decreased by $0.25 cwt. ($5.50 /mt or $5 /nt) in the past week. Import rebar prices now range from $24.50 cwt. to $25.50 cwt. ($540 /mt to $562 /mt or $490 /nt to $510 /nt) FOB loaded truck, in US Gulf ports. The pricing trend for import rebar is still down, but it may turn around before too long. There has been some new buying activity for rebar ex-Turkey. It is likely that the Turkish rebar mills will soon reevaluate their competitive prices after demand starts to pick up again. Turkish prices may rise again when more orders for February/March deliveries are placed. Asian rebar mills are still behind the curve, offering higher numbers than the Turkish mills. This is largely due to the increasing price of billets in Asia. Preliminary census data from the US Steel Import Monitor shows that during the month of October 2006, the following countries exported the most rebar tonnage to the US: Turkey, at 65,032 mt; Bulgaria, at 13,265 mt; Mexico, at 11,114 mt; Thailand, at 10,230 mt; and Malaysia, at 10,030 mt. The domestic market is still very soft, but prices have not budged in the past month. Experts predict that domestic mills will most likely be able to maintain current prices if scrap prices continue to trend sideways. The small up-tick in auto bundle pricing this month is a good indicator that shredded scrap will not go down in the next month. As for rebar demand in the US, it is still quite slow. The US housing market, typically the largest consumer of rebar, is still weak. Consumption from the non-residential construction sector is still OK, but as we enter the winter months, construction will slow down even further. Construction activity in the southern states should remain decent this winter, but the domestic rebar market as a whole will suffer from the slowing housing market this winter. This month, domestic rebar offers still range from $26.65 cwt. to $27.15 cwt. ($588 /mt to $599 /mt or $533 /nt to $543 /nt) ex-mill. The usual price extras apply for smaller sizes and grade 60. The pricing trend is still slightly down.