Rebar offering prices for both domestic and imports have remained the same since our report last week; however, for both markets the pricing trend is strongly up as the busy season is soon approaching and the market is becoming tight.
North America's longs products leader, Nucor Steel, announced late Friday its decision to keep rebar transaction prices stable for March shipments. Following a small dip in shredded scrap prices, Nucor adjusted its raw materials surcharge (RMS) down by $10 /nt ($11 /mt or $0.50 cwt.) from its February RMS to $225 /nt ($248 /mt or $11.25 cwt.). The company made a corresponding upward adjustment to base prices, leaving transaction prices flat for March shipments.
For March shipments, domestic rebar prices continue to range from $36.15 cwt. to $36.65 cwt. ($797 /mt to $808/mt or $723 /nt to $733 /nt) FOB mill.
Though domestic prices remained stable for this month, the pricing trend is strongly up as distributors' inventories are running low from the lack of imports and the busy season is ahead of us. Also, even with last month's announced increase for domestic rebar products, prices in the US are quite lower than their international counterparts.
Import prices are well above the domestic levels keeping US buyers from purchasing offshore material, which is adding to the tightness in the market. Domestic buyers, for the most part, are now only interested in buying imports if they are having trouble getting the exact sizes they need from domestic mills, and there doesn't seem to be any softening ahead in the international markets.
Traders have sold all of their cheaper positions that were purchased when costs were lower, so they are no longer able to make any money if they sell at less than $37.50 cwt. What's left is the newer transactions booked at a higher pricing level. Traders were expecting domestic prices to go up for March shipments, which would have put them in a better position in the market. Now that prices in the US have stayed put for a little while longer, traders will have to hold on to those positions until the domestic prices pick up some more.
Import rebar offers for US customers have remained stable since last week's report, ranging 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.