US rebar market – Scrap will determine market direction

While it is too soon to say how much domestic rebar prices will be in October, it is safe to say that if prices do change, they will go down. Demand for rebar has been softening in some parts of the country since July. The mills are reportedly building some floor stock and asking their customers to pick their orders up quickly. If scrap prices do not change, then the most likely scenario is that domestic rebar prices will stay stable in October. But if scrap prices fall, rebar prices will no doubt slip as well. For September, domestic rebar prices still 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 and grade 60. The pricing trend is still neutral. Import offers on the market have not changed since last week, but experts predict that prices will continue to trend down. The Asian rebar market is not doing well at all, and exporting countries in the region are all interested in shipping to the US. However, there is not much demand for import rebar in the US because of already-high inventories. Inventories on the West Coast are particularly high, and Gulf Coast inventories will be extremely high within two months, with the rates that import rebars are coming in. Also, Mexican producers have more availability than usual to export to the US. This is a sign that the market in Mexico has softened. Because of these factors, prices should be cheaper for January arrivals. Still, downstream demand is still solid, and distributors are still able to move tonnage on the ground. Therefore, the pricing trend for import rebar is still only slightly down. Import rebar offers now range from $26.50 cwt. to $27.50 cwt. ($584 /mt to $606 /mt or $530 /nt to $550 /nt) FOB loaded truck, in US Gulf ports. Prices are about $0.50 cwt. higher in the East Coast ports.