US rebar prices to improve along with scrap prices

With shredded scrap prices up $35 to $45 /long ton this week, domestic rebar prices in the US are almost guaranteed to go up as well. This time, mills may pass along the entire scrap increase to rebar prices since demand is steadily picking up. For now, domestic prices still range from $27.40 cwt. to $27.90 cwt. ($604 /mt to $615 /mt or $548 /nt to $558 /nt). Extras for smaller sizes and Grade 60 change from one domestic producer to another and vary depending on bar size, grade, and length. The smallest rebar size, #3 (9.5 mm) fetches the highest extra, usually about $4.00 cwt. ($88 /mt or $80 /nt). Sizes #4, #5, #6 also carry extras with lesser amounts. The domestic pricing trend is still strongly up, with another increase expected to be announced in the coming weeks. The Mexican market is also heating up along with the domestic market. Therefore, Mexican rebar offers to the US are slowing down. The pricing trend for imports is also strongly up as the world rebar markets are still hot, and the Asian billet market continues to tighten. In the last few weeks, large distributors started accepting the new pricing level and soon enough, medium to small distributors will have to follow and commit at even higher prices. There is still upward momentum for rebar prices and market players predict that import prices may reach $30.00 cwt. ($661 /mt or $600 /nt) by this summer. Domestic mills are expected to increase prices steadily and maintain the usual pricing gap by implementing size and grade extras and eliminating the discount for 20 footers. Larger rebars are mostly consumed by fabricators that cater for Department of Transportation (DOT) jobs that require US-made rebars, and are therefore not subject to import competition. This week, import rebar prices still range from $28.00 cwt. to $29.00 cwt. ($617 /mt to $640 /mt or $560 /nt to $580 /nt) FOB loaded truck, in US Gulf ports. Similar prices are valid for West Coast discharge, primarily from Asian sources. License data from the US Steel Import Monitor shows that in January 2007, a total of 130,289 mt of rebar tonnage was imported to the US, compared to 81,802 mt in December and 129,453 mt in November. In January, the largest rebar exporters to the US were: Turkey at 37,333 mt, followed by Malaysia at 28,113 mt, Mexico at 19,981 mt, Brazil at 18,748 mt, and Japan at 10,806 mt.