With the robust rise seen in shredded
scrap prices, there is a good chance that domestic
rebar producers may up their prices for February shipments.
Shredded
scrap has risen $20 /nt to $30 /nt since last month, so major
rebar producers like
Nucor will have to raise raw material surcharges for February shipments. Since the market hasn't taken any turns for the worst since last month, it is likely that producers will keep
rebar base prices the same or only slightly lower in February, which would result in a net increase in the overall transaction price.
Of course another pessimistic scenario is that as the domestic
rebar market is still a bit sluggish due to holidays and fourth quarter doldrums, it is possible that they will keep prices stable by decreasing the base price by the same amount as the raw material surcharge increase in order to encourage buying. Still, in our
opinion, it is probably more likely that prices will go up, since the domestic
rebar mills are relatively strong in Q1 (compared to Q4), and the mild winter around the world is allowing non-residential
construction projects to flourish in the US and abroad. Domestic mills will probably follow the trend of the foreign mills and use this opportunity to raise net
rebar prices.
For now, US
rebar prices are still ranging from $26.65 cwt. to $27.15 cwt. ($588 /mt to $599 /mt or $533 /nt to $543 /nt) ex-mill. The usual price extras apply for smaller sizes and grade 60. The pricing trend is slightly up at the moment.
As regards import
rebar, the pricing trend is now strongly up, as major overseas
rebar source
Turkey is raising both its domestic and export
rebar prices, reflecting its strengthening home market. There is currently a lot of reluctance to offer to the US, as Turkish mills also suspect US prices will rise soon. And as far as import
rebar for the Gulf market goes, the Turkish mills are the only game in town. Also, the increase in
billet prices in
Turkey and worldwide will further tighten up the world
rebar market.
Import offers are still hovering at about the same range as they were last week - the few traders that are offering import
rebar are still quoting in a range of $25.50 cwt. to $26.50 cwt. ($562 /mt to $584 /mt or $510 /nt to $530 /nt) FOB loaded truck, in US Gulf ports. This level is set to rise soon.
In the US, traders and distributors that were fighting to get rid of their excess
rebar tonnage just one month ago are now buying again in order to replenish their inventories by March and April. The amount of import
rebar tonnage coming into the US in January and February is minimal because there weren't too many orders placed in Q4. It looks like we are at the start of another upward cycle for import
rebar buying.