Import rebar offers in the US have risen by $25 /nt ($28 /mt or $1.25 cwt.) since last week, and with asking prices from Turkey continuing to rally upward, more price increases for US customers are on the way.
Most import rebar offers for the US now range from $34.00 cwt. to $35.00 cwt. ($750 /mt to $772 /mt or $680 /nt to $700 /nt) FOB loaded truck, in Houston. This level is still cheaper than the new asking prices from Turkish mills, and soon the price for US customers will reflect Turkey's price increases. Therefore, the pricing trend for import rebar is strongly up.
Turkey continues to be the main source that is currently offering import rebar to the US. As we mentioned last week, there is some Mexican material available in the Texas market, though these offers are very patchy, and often subject to renegotiation or cancellation.
Taiwan continues to be priced out of the import rebar market in the US, with its FOB prices now over $800 /mt ($726 /nt or $36.29 cwt.). There is some Japanese material offered on the West Coast, though the amount of material available is very limited. The West Coast hasn't been very active in import buying yet, and the market is not as tight as the Gulf market because of the low demand, attributed to the housing market fallout.
Final census data from the US Import Monitor continue to show a decreasing amount of import rebar arrivals to the US in 2007 compared to 2006, with a major decrease in imports from Turkey in particular (which is no surprise with Turkey's unrelenting price hikes seen in the second half of 2007). Year-to-date through October, rebar imports to the US totaled 1,577,462 mt, compared to 2,136,049 mt in the same period of 2006. The top import rebar sources for the US YTD October 2007 were: Turkey, at 392,334 mt (compared to 1,044,910 mt in the same period of '06); Taiwan, at 333,273 mt; Mexico, at 232,831 mt; Japan, at 138,428 mt; and Brazil, at 107,304 mt.
Domestic rebar prices in the US are also set to increase significantly due to the $80 /long ton jump in scrap prices seen this month, as well as the rising import prices. Producers like Nucor aren't expected to increase their offering prices by the full $80 /nt ($88 /mt or $4.00 cwt.) - rather they will choose to protect their fabricator base by softening the effective increase some. The ineffective foreign fighter discount may be lifted, raising the 20 ft rebar prices by $40 /nt ($44 /mt or $2.00 cwt.) in some markets, including in the Gulf. Nevertheless, there will be an increase on the effective price for all domestic rebars, including 40 ft material, possibly upwards of $40 /nt.
For January shipments, domestic prices will continue to range from $32.15 cwt. to $32.65 cwt. ($709 /mt to $720 /mt or $643 /nt to $653 /nt) FOB mill. Producers' February price announcements will likely be made next week.