US rebar market – Import prices poised to fall

Although we have not seen any aggressive offers yet, market players are waiting for a downward pricing correction for import rebar. Demand on the ground is still decent, but the big domestic distributors are not hungry for new orders as their inventories are sufficient to last until year-end, especially in the US Gulf. There is still some demand for new shipments to North East before the end of the year. Foreign mills from major exporting countries, such as Turkey, have lowered their offer prices, which will translate to lower trader prices. Eventually these decreases will be passed along to the US consumers, which could stimulate one last round of import buying activity in the fourth quarter. But for now, there are no bargain offers floating around yet, and the market is quiet. Import rebar offers still range from $26.75 cwt. to $27.75 cwt. ($590 /mt to $612 /mt or $535 /nt to $555 /nt) FOB loaded truck, in US Gulf ports. Recently released import statistics from the US government show that Turkey is still the US' largest import source for rebar, by far. During the period from January 2006 through June 2006, the US imported the most rebar from Turkey, at 639,527 mt; followed by Taiwan, at 190,723 mt; and Japan, at 125,370 mt. The domestic pricing trend for rebar is still neutral, as it is likely that prices will remain the same through October. While the domestic housing market is slumping, the non-residential construction market is still strong, so there is no huge decrease in rebar consumption. As we reported last week, Nucor has chosen to keep prices steady, despite the decrease in shredded scrap prices, September prices will not change from August levels, as the company will raise the base price to compensate for the lower Raw Materials Surcharge. Domestic rebar prices will continue to 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.