As of last week, the consensus in the US domestic rebar market pointed toward continuing stability, even if scrap prices increased modestly this month, as first predicted. But as it becomes clear that shredded scrap prices will settle sometime this week at well over $100/mt higher, US rebar mills have taken advantage of the situation with a $5.00 cwt. ($110/mt or $100/nt) price increase, effective with all new orders.
Sources tell SteelOrbis they are still surprised at the amount of the increase because it is “zero percent demand-based.” The increase in scrap prices is also attributed to factors other than demand, or even supply, as global scrap prices spiked in the aftermath of Russia’s invasion of Ukraine, along with iron ore, pig iron, and slab prices. However, this does not mean US rebar mills will find much resistance to higher prices—sources say the increase is “all but assured to go through.”
Other sources are concerned that only independent distributors and fabricators will end up paying the full increase, as mill-affiliated downstream operators continue receiving “preferable pricing” from their parent companies. For now, as the market absorbs the price increase news and pricing comparisons between mill-affiliated and independent downstream companies become clearer, the average spot price range for US domestic rebar is holding at $54.50-$56.50 cwt. ($1,202-$1,246/mt or $1,090-$1,130/nt) ex-mill in the Midwest while offers on the East coast are still at $53.50-$55.50 cwt. ($1,179-$1,224/mt or $1,070-$1,110/nt) ex-mill. By next week, however, those ranges are expected to shift upward.