US rebar prices continued to trend sideways in the last week, though sales activity remained as frosty as the weather conditions in much of the country.
With the approaching holidays and continuing slow demand, many rebar mills, distributors, fabricators and end-users have already closed up shop for the year. The stormy winter weather that has set in across the United States has also slowed down the market even further. And it looks like it will be a long winter for the US rebar market.
While US rebar prices seem to have just about bottomed out, and scrap prices are likely to rise again in January, there is no rebound in rebar demand expected in the near future. The combination of the cold weather and weak economic climate will keep any concrete pouring and building activity at a minimum for the next several months, and while the major national infrastructure investment proposed by the incoming Obama administration provides a glimmer of hope for the US rebar industry, the effects of such an investment would probably not be felt until at least the second quarter of 2009.
Still, US rebar businesses are hoping to see at least some improvement in sales activity in early 2009 so they can start off the New Year on a good foot. Mills may opt to eat another scrap price increase, keeping prices stable February as they will do in January, or, they may announce a small increase to try to create some optimism and stop the price decay from bleeding into 2009.
For now, most rebar offers from US mills continue to range from $28.00 cwt. to $28.50 cwt. ($617 /mt to $628 /mt or $560 /nt to $570 /nt) ex-mill. Some special deals may be concluded at slightly under this range, however.
Import offers also seem to be stabilizing, with most new offers from Turkey continuing to range from $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) duty-paid FOB loaded truck in US Gulf. Mexican mills are offering at the same range, delivered to Houston. Spot offers for immediate delivery are still slightly higher than the $25.00 cwt. to $26.00 cwt. range, particularly for the more rare sizes. However, inventories of other sizes, like #3s, are still very plentiful, and spot offers for these more common sizes are not commanding much higher of a price than the new offers from foreign mills.
Activity in the US import rebar market is still slow, though Gulf-area traders say that they are still booking some future offers and are still able to move some tons in Houston, though only a few truckload quantities here and there. The West Coast market, on the other hand, is said to be particularly weak, with high inventory levels that are hardly moving at all.