While offers out of East Asia continue to maintain their strength and freight rates are still on the rise, offering prices from Turkey, the one of US' largest import rebar sources, have started to decrease, reflecting Turkey's deteriorating domestic prices.
In addition, lower priced Mexican offers continue to surface in the market. Some Mexican producers are trying to find homes in the US for some limited tonnage, but in doing so, are bringing down both spot and future offer prices.
On the whole, import rebar prices have come down by approximately $0.25 cwt. in the past week, with most offers now ranging from $29.25 cwt. to $30.25 cwt. ($644 /mt to $667 /mt or $585 /nt to $605 /nt) FOB loaded truck, in US Gulf ports.
Despite the softening import prices, the decrease may be short-lived. Prices in Asia are strengthening due to the increasing billet prices and high ocean freight rates.
It is interesting to note that import statistics show that Taiwan for the first time in 2007 registered a higher export tonnage to the US compared to Turkey.
Data from the US Import Administration show that during the first eight months of 2007, rebar imports in the US totaled 1,409,435 mt, compared to 1,848,033 mt for the same period of 2006. Year-to-date at the end of August 2007, the top import rebar shippers to the US were: Taiwan (328,817 mt), Turkey (326,775 mt), and Mexico (186,395 mt).
On the domestic side, prices are still trending sideways, and traders and distributors are still trying to work down their inventories. There still has not been a big rebound in demand, but with less and less imports arriving, domestic mills' order books should remain relatively full. There is very little downward pressure expected for the remainder of the year.
Most domestic offers continue to range from $30.90 cwt. to $31.40 cwt. ($681 /mt to $692 /mt or $618 /nt to $628 /nt) FOB mill.