US rebar market softens, in contrast to world market

The domestic rebar market in the US is showing definite signs of weakness, with the $15 /nt reduction in domestic producers' net transaction prices last week. The first clue that the market was losing its strength was Nucor's price discount on 20' rebars several weeks back. Now with Nucor's announced price decrease last week, it looks like the good times in the market are over. The reasons for this market downturn are the downward pricing trend in the scrap market as well as the weak housing market. However, seasonal softening of rebar prices at the end of the year is normal, and come January and February, buying activity will resume, tightening up the market to some extent again. For now, the pricing trend is slightly down. After the $15 /nt ($0.75 cwt. or $16.50 /mt) price reduction last week, domestic rebars now range from $26.65 cwt. to $27.15 cwt. ex-mill. The usual price extras apply for smaller sizes and grade 60. The import rebar market is softening as well but is still relatively strong. Turkish mills have reportedly started to show interest in selling to the US again and may soon be willing to give in to the US market trend and lower their offering prices. While Turkey and other import markets are strong, the US market is extremely slow for import buying activity. The US will eventually need to start buying again, though at this point it is unclear when that will be or at what price level. There is no evidence of any import bargains just yet, and the average import rebar offers on the market are at the same range as last week. The pricing trend is now neutral. Completed import rebar transactions still range from $26.00 cwt. to $27.00 cwt. ($573 /mt to $595 /mt or $520 /nt to $540 /nt) FOB loaded truck, in US Gulf ports. Final census data from the US Steel Import Monitor shows that in the first eight months of 2006 (the most recent time period for which YTD data is available) the top exporters of rebar to the US were: Turkey at 804,637 mt, Taiwan at 213,271 mt, and Japan at 186,535 mt. In comparison, August YTD data from 2005 showed that the top exporters of rebar to the US for that period were: Turkey at 310,469 mt, Mexico at 161,725 mt, and Japan at 115,885 mt.