US rebar prices have continued to trend sideways since last week, with market leader Nucor announcing earlier this week that it will keep rebar transaction prices stable in October.
Nevertheless, while domestic rebar prices are currently trending flat, they are still down by an average of $1.00 cwt. ($22/mt or $20/nt) from a month ago, and there are no indications that the market will start to bounce back in the near future.
As summer draws to a close, US rebar demand remains disappointingly slow, say fabricators and distributors. Although the US may be officially emerging from recession, construction, particularly on the commercial side, is expected to continue sagging for at least several quarters. The latest construction data released by the US Department of Commerce earlier this month show that US construction spending fell 0.2 percent in July, led by drops in both private nonresidential construction and public construction.
With demand from the construction sector remaining lackluster, rebar activity remains slow, and unlike in some other product markets, the domestic rebar market faces some competition from Mexican producers. While US domestic offers remain at a range of approximately $24.50 cwt. to $25.00 cwt. ($540/mt to $550/mt or $490/nt to $500/nt) ex-mill, import offers from Mexico now range from approximately $23.50 cwt. to $24.50 cwt. ($518/mt to $540/mt or $470/nt to $490/nt) delivered to Texas, after dropping by about $1.00 cwt. since last week. However, buyers are still keeping their inventories slim and purchasing only small amounts of Mexican material, if any, so these offers still aren't posing a major threat to US rebar producers.
Furthermore, import Turkish offers still remain largely out of the picture, as they are still offered at an uncompetitive level of $26.00 cwt. top $27.00 cwt. ($573/mt to $595/mt or $520/nt to $540/nt) duty-paid, FOB loaded truck in US Gulf ports. However, depending on whether Turkish producers see any pick-up in demand after Ramadan ends next week, these offers may soon fall. Currently, Turkish producers are seeing very few bookings and if they do not see some increase in activity by month's end, they will likely have to lower their prices.
For now, import rebar prices are trending sideways, pending Turkey's price move post-Ramadan.
Import license Data from the US Department of Commerce show that rebar imports declined somewhat sharply in August after rising in July. Import licenses for rebar in August totaled 19,247 mt, compared to 29,540 mt in July and 75,503 mt in August 2008. The largest sources of import rebar in August 2009, while both sharply down from the previous month, remained Mexico and Turkey, accounting for 11,285 mt and 4,135 mt respectively. Dominican Republic represented the third-largest source of import rebar in June with a total of 3,654 mt.
