Import rebar offers in the US have remained at the same price range as last week; however, with replacement costs trending sharply upward, traders' prices for US customers will be in for a big price increase once the lower-priced tonnage is sold out.
Most spot offers of import rebar from traders to US customers continue to range from $37.50 cwt. to $38.50 cwt. ($827 /mt to $849 /mt or $750 /nt to $770 /nt) FOB, loaded truck, in US Gulf ports.
There is currently not much buying activity at the above price range; however, replacement costs are currently higher than $44.00 cwt. ($970 /mt or $880 /nt), so once traders' cheaper material is liquidated, they will have to raise their prices. Despite the lukewarm rebar demand in the US, availability is relatively tight from the general lack of import arrivals, and so customers will eventually end up paying the higher prices.
Final license data from February 2008 show that Turkey and Mexico have remained the US' main import rebar sources (though Mexico has been absent from the US market in recent weeks to meet demand from their stronger home market). The license data show 138,198 mt of rebar imports to the US in February, with 76,624 mt coming from Turkey, and 48,994 mt originating from Mexico. Other smaller import sources in February were Japan, at 6,692 mt; Dominican Republic, at 4,559, and Germany, at 673.7 mt.
On the domestic side, last week Nucor announced that it would raise rebar prices in April by $25 /nt ($28 /mt or $1.25 cwt.), just higher than the amount scrap prices rose in March. Scrap prices are expected to rise again in April, and with import prices continuing to escalate, it is expected that US mills will raise their prices for May shipments by a more significant amount than the April increase.
Through April, domestic prices will continue to range from $37.35 cwt. to $37.90 cwt. ($823.43 /mt to $835.55 /mt or $747 /nt to $758 /nt) FOB mill.
The gap between the US and international prices is so large that traders are now exporting US rebars to Latin America, which accepts ASTM standards. A decent amount of billets is also being exported to Southeast Asia, by container.
To conclude, the pricing trends for both import and domestic rebar in the US remain strongly up, although it is very likely that domestic mills do not want to close the gap completely, and will continue to keep their prices under import price levels in order to prevent customers from turning to imports.