US rebar offers slightly up after price hike; still no takers for imports

US rebar mills are determined to push through their latest $40/nt ($44/mt or $2.00 cwt.) price increase, though very few sales are taking place, and spot prices have yet to rise to mills' desired levels.

Despite the dwindling inventories of rebar in the US, underlying weak demand continues to prevent a solid recovery for the US rebar market. Still, mills seem set on pushing through their $40/nt August increase in order to recover increased scrap costs and maintain their slight upward price momentum. So far, about $20/nt ($22/mt or $1.00 cwt.) of the $40/nt has gone through, with most spot prices for domestic rebar now ranging from $25.50 cwt. to $26.00 cwt. ($562 /mt to $573 /mt or $510 /nt to $520 /nt) ex-mill.

Mill sources say that producers intend to push through the full increase, though distributors say that if a serious buyer offers a slightly cheaper bid, a mill will likely accept it as they are desperate to sell.

Meanwhile, on the import side, since raising prices following the US hike, Mexican rebar offers to the US have remained at a range of $24.50 cwt. to $25.50 cwt. ($540 /mt to $562 /mt $490 /nt to $510 /nt) delivered to California and Texas. However, they are not getting any orders at this price level yet. Mexican mills  are remaining firm with their pricing for now, waiting to see how much of the US price hike will go through. But if they remain unable to get any bookings, they will likely drop them to a level that buyers find more acceptable.

Turkish offers also remain at last week's levels of $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 ports , there there are still no bookings at this price level. Turkey's home market and export markets in Europe and the Middle East are not strong and are expected to weaken further with the approach of the European summer holiday season and of Ramadan (both of which start in August).

A few pieces of good news for the US rebar market are that customer inventories are slim, and prices seem to have at least bottomed out. Furthermore, there should be a slight up-tick in consumption from US stimulus package-funded projects coming this summer. However, commercial construction remains very weak and is not projected to improve in the near future, leaving little hope that demand will make a major turnaround in the near-to-midterm.