In an unusual move for US domestic rebar mills, the $1.25 cwt. ($25/nt or $28/mt) price increase announced in early March was “rescinded” late last week, although sources say the use of that particular language is instead of calling it a price decrease is “curious” when the net effect of the move is spot prices dropping by $1.25 cwt. into the range of $31.25-$32.75 cwt. ($625-$655/nt or $689-$722/mt) ex-mill.
Some sources say the move reflects widespread dealmaking in the US domestic rebar market that ramped up once April scrap predictions started to point toward a likely downtrend. Mills reportedly didn’t want to appear “beholden” to scrap prices, although they have “no problem” blaming imports.
In Nucor’s letter to customers announcing the price change, the company attributed it “in large part to the continued surge in imports from Turkey and other countries and the negative impact this is having on both the fabricated and distributor pricing in the markets that we service.”
US rebar import prices from Turkey have experienced a slight downtrend over the course of the last month, but rebar import tonnages for the first quarter have been on par with levels seen in Q1 2016.
As for the present state of dealmaking in the US domestic rebar market, sources say larger customers will still be able to book below the new spot range, and depending on how much April scrap prices decline (the market is expected to settle later this week), smaller customers might be able to “shave a few cents” off the top end of the range.