Demand in the US rebar market continues to be soft and prices remain under pressure from the poor market conditions, despite last month's attempt by domestic mills to boost prices.
US rebar demand appears to have bottomed out, but until it starts to improve, it seems unlikely that customers will accept any increases. Most US domestic rebar offers continue to range from $24.00 cwt. to $24.50 cwt. ($529 /mt to $540 /mt or $480 /nt to $490 /nt) ex-mill, and have not generally improved since Nucor announced a modest $20/nt price hike two weeks ago. On the bright side, prices have not weakened for several weeks, and price stability, rather than improvement, may have been the actual goal of the price increase.
Meanwhile, Mexican mills have been adjusting their price increase expectations from the US market slightly downward. Originally, mills announced an approximate $2.00 cwt. increase, and they still continue to push sales over $23.00 cwt. delivered in Texas and California. Because they are not getting many orders at these price levels, Mexican prices are trending slightly down in the near term.
Most Mexican rebar offers for the US currently range from $23.00 cwt. to $24.00 cwt. ($508 /mt to $ /mt or $460/nt to $480 /nt) delivered to Houston.
Meanwhile, Turkish rebar offers for the US remain mostly out of sight as even with recent price drops, Turkish imports are still unable to compete in the US market. Most Turkish import offers continue to be at the same range as last week after having dropped $0.50 cwt. ($11 /mt or $10 /nt) two weeks ago. Turkish offers continue from about $23.00 cwt to $24.00 cwt ($507/ mt to $529/ mt or $460 /nt to $480 /nt) duty-paid, FOB loaded truck in US Gulf ports. However, Turkish mills have been getting more aggressive in attempts to book orders lately and traders' offers of Turkish imports will soon reflect this. The pricing trend for import rebar remains slightly down.
On the demand side, inventories are low but consumption is still very slow due to the depressed construction markets. However, there are signs that things may be starting to slowly turn around as regards the US economy and housing market. In relation to the real estate market, this Wednesday the National Association of Realtors (NAR) announced that the Pending Home Sales Index, a leading indicator for the housing sector, rose from March to April by 6.7 percent, and in April it recorded a year-on-year increase of 3.2 percent. The improvement in US home sales in April comes as a result of the historically low interest rates, increased affordability and the $8,000 first-time buyer tax credit.