As one US rebar mill jumps the gun with an early-announced price increase, others wait for scrap to make their move.
Gerdau Long Steel North America's surprise $1.00 cwt. ($22/mt or $20/nt) price increase last week caught many off guard, but it was not immediately clear whether other mills--including the usual leader of the pack Nucor--would match it. But as the possibility for a shredded scrap price increase next month becomes more likely, sources tell SteelOrbis that other mills will probably wait until the first full week of September (after scrap is announced) to announce an October 1-effective increase similar to Gerdau's September 19-effective $1.00 cwt. This will allow them to attribute the move to raw materials, not another mill, and some sources even suggest that Gerdau will quietly move the effective date out to October to stay competitive.
However, spot prices for US domestic rebar have not been affected in the wake of Gerdau's announcement, and still remain in the range of $35.00-$36.00 cwt. ($772-$794/mt or $700-$720/nt) ex-mill. If transaction prices for all mills indeed increase $1.00 cwt. for October, the general sentiment is that mills will not find too much resistance getting those prices--if, that is, scrap prices rise by a comparative amount. Some industry insiders are still holding onto the idea of a sideways scrap move, and if that comes to pass, and mills don't have raw material costs to lean on, they might be forced to be more flexible with the increase.
In contrast to the livening US domestic market, the import market for rebar has been quiet over the last week. Most Turkish mills are closed this week for the end of Ramadan, so no new offers will be heard until the beginning of next week. Currently, offer prices are still in the range of $34.50-$35.50 cwt. ($761-$783/mt or $690-$710/nt) DDP loaded truck in US Gulf ports, and there are rumors that Turkish mills want to kick off the end of the holiday with a price increase. However, they would have an opportunity to benefit by keeping prices stable; if the US domestic market continues its current upward trend, imports coming in at the middle to end of Q4 might not look so bad to US buyers.
The import market from Mexico is similarly quiet, as Mexican mills wait to see if Gerdau's increase has any influence over spot prices in the near term. Most of their current offer prices of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) DDP loaded truck delivered to US border states have been withdrawn for the moment, and it seems most likely that no new offers will appear until at least Nucor announces their October prices.