Despite tepid demand levels and stagnant buying activity, US rebar mills are putting their collective foot down in an effort to stop prices from slipping any further.
Last week, certain US domestic spot deals were heard approximately $0.50 cwt. ($11/mt or $10/nt) below the general spot range of $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) ex-mill, but those discounts have seemingly dried up this week. Sources tell SteelOrbis that after nearly two months of consistent downticks in spot prices, domestic rebar mills are fed up and are now holding the line at the aforementioned level. Early scrap pricing speculation points at a potential sideways-to-up trend, and if shredded scrap increases in June, some industry insiders think that mills might even try to bump prices up slightly, the result of an apparent bullish attitude toward construction activity in the rest of Q2 moving into Q3. Some of this attitude is based on a generally positive outlook for the US economy, as well as opportunities--bittersweet as they may be--to rebuild areas in the Midwest and Southeast that have been heavily damaged or outright destroyed in recent natural disasters and storms.
For now, at least, it seems as though any upcoming demand for rebar will primarily benefit the domestic sector--import prices from Turkey are still level with US offerings, at $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) duty paid FOB loaded truck in US Gulf ports. The local Turkish market is still trending up, as Turkish rebar mills claim to enjoy increased demand from Africa. However, despite the demand situation in the US, Turkish mills increased their export offer prices to the US in the last week, but the increase has not translated into bookings in the US; traders still report little inquiry activity for overseas rebar.
Import activity involving Mexican rebar is similarly quiet for the moment, even though Mexican offers are still in the range of $32.25-$32.75 cwt. ($711-$722/mt or $645-$655/nt) duty paid FOB delivered to US border states. In the event of a demand pick-up in the US, however, US buyers will likely turn to its neighbor to the South before inquiring overseas if prices from Mexico and Turkey maintain such a wide margin.