US rebar market – Shredded plummets but Nucor doesn't budge

Though shredded scrap prices took a sharp dive earlier this month, leading domestic rebar producers chose to maintain their August pricing levels for September orders. While Nucor lowered the Raw Materials Surcharge (RMS) for its bar products by $43 /nt ($47 /mt or $2.15 cwt.) to reflect the decrease in scrap prices from July, the company increased base prices for these products by the same amount, keeping prices stable for another month. It is likely that other domestic mills will follow Nucor's lead, as usual. Domestic rebar prices will continue to 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. Nucor's move to keep prices stable despite the sharp decrease in scrap prices surprised some, but it looks like the market is strong enough to support the increase in base price. Mills are still pretty busy and demand for the non-residential construction sector is still decent. Also, after scrap prices nosedived last week, market-watchers say the scrap market has already rebounded this week to the tune of $10 to $15 / long ton. The domestic pricing trend for rebar is now neutral, as it is likely that October prices will also stay the same. The pricing trend for rebar imports, on the other hand, is still slightly down. Import prices have decreased by about $0.25 cwt. ($5 /nt or $5.50 /mt) since last week, and it is likely that prices will continue to decline as distributors are full until the end of the year and are not looking to book any major import tonnage from usual import sources like Turkey and Taiwan. Therefore, these foreign mills will probably lower prices in order to move some tonnage as we approach the fourth quarter. Import rebar orders now range from $26.75 cwt. to $27.75 cwt. ($590 /mt to $612 /mt or $535 /nt to $555 /nt) FOB loaded truck, in US Gulf ports. Final census data from the US import monitor shows that in the first five months of 2006, the top countries from which the US imported the most rebar were: Turkey, at 533,380 mt, up from 169,995 mt imported from Turkey in the first five months of 2005; Taiwan, at 149,434 mt, up from only 189.7 mt YTD May 2005; Japan, at 100,457 mt, up from 53,526 YTD May 2005; Canada, at 70,917 mt, down from 97,000 mt May 2005; and Germany, at 57,252 mt, up from only 489.2 mt YTD May 2005.