Nucor has announced that April transaction prices for its rebar, merchant bar and structural products will rise $25/nt.
With domestic scrap prices and import rebar prices continuing to escalate, this price hike by Nucor does not come as a great surprise. Prices didn't take a huge leap though; rebar sales are still not all that strong, especially on the West Coast, as construction and the general state of the economy are not particularly healthy, and mills are not overbooked.
Still, with replacement costs from import mills trending significantly higher than domestic prices, customers will continue to book tons from domestic mills, thus ensuring that any moderate price increase will be accepted. Shredded scrap prices have risen approximately $20 /long ton in March so far, but some had been predicting that due to the stronghold that domestic mills currently have over the market, Nucor would be able to make the unprecedented move of upping their rebar numbers even $20 /nt higher than scrap prices have risen, for a total month-on-month price hike of $40 /nt. However, this did not happen and the increase was more modest.
With the new increase, domestic rebar prices now range from $37.35 cwt. to $37.90 cwt. ($823.43 /mt to $835.55 /mt or $747 /nt to $758 /nt) FOB mill for April shipments. The pricing trend still remains strongly up as domestic prices still have not caught up with imports.
As for imports, traders continue to sell their previously purchased import material at a range of $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. Replacement costs based on the new Turkish numbers, however, will be at least $40 cwt. ($882 /mt or $800 /nt), so once the cheaper material runs out, import customers are in for another major price hike.
The pricing trend for imports remains strongly up since the Turkish scrap market is, as one trader put it, "going nuts." Due to Turkey's skyrocketing scrap prices along with the robust rebar demand from the Middle East, Turkey's export rebar numbers are expected to continue rallying since, even if the US may not want to pay the higher prices, other markets will. Also, Turkey does not have much competition to contend with on the rebar side; Turkey is currently the only major import source offering rebar to the US market, as other typical import sources, including Taiwan and other Asian countries, are not offering competitively due to the billet shortage in Asia. Mexico is also currently out of the US market due their strong home market.