Although shredded scrap prices only went up $15/lt this month, one major US rebar mill has already announced a $30/nt increase in rebar prices, far beyond what industry insiders expected.
Last week it was predicted that rising import prices, combined with an expected increase in shredded scrap prices, would help US mills firm up rebar spot prices closer to official asking levels, which remained about $2.00 cwt. ($44/mt or $40/nt) higher. However, many believed that a scrap increase of $20/lt or less would not be enough to officially raise transaction prices--instead, a mild scrap boost would merely give mills incentive to push for slightly higher spot prices.
Therefore, Gerdau Long Steel North America's announcement on Monday that rebar prices would rise by $1.50 cwt. ($33/mt or $30/nt) for July shipments came as a surprise, especially considering that shredded scrap prices only rose by $15/lt. Also surprising was the fact that Gerdau released the increase ahead of Nucor Bar Mill Group, which usually leads the way in monthly price announcements. So far, it is too early to tell just how much of the increase mills will be able to push through--current spot prices are still in the range of $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) ex-mill, but there have been reports of mills discreetly trying to get up to $1.00 cwt. ($22/mt or $20/nt) more during the past week (before the official price announcements were released). How successful they are could largely depend on demand levels, which are still rather languid.
As for imports, Turkish prices did not move in the last week as predicted--one Midwest trader told SteelOrbis that Turkish mills realize their prices are too high in the US, and they are currently mulling their options. Therefore, Turkish rebar is still being offered in the US for $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) DDP loaded truck in US Gulf ports.
Mexican rebar prices, on the other hand, increased shortly after US Midwest scrap prices were announced last Friday--sources tell SteelOrbis that Mexican mills believed their offers to be much too low compared to US domestic and overseas competition. Prices rose by approximately $1.25 cwt. ($28/mt or $25/nt), with most offers now in the narrow range of $33.50-$34.00 cwt. ($739-$750/mt or $670-$680/nt) DDP loaded truck delivered to US border states. However, even these prices have not been met with overwhelming interest in the US.