Last week’s flurry of price increases in the US domestic rebar market easily absorbed into the spot range, but the potential for further increases is uncertain. Hanging in the balance is Gerdau’s $1.00 cwt. ($20/nt or $22/mt) “distributor extra” increase, which sources say was “not well thought out” in the first place. Demand is still strong, but certain factors that might have supported an extra increase are no longer in play.
First, import offers have hit their peak. With Turkish rebar offers starting to slip, US domestic mills have lost key competitive leverage. Second, early scrap price forecasts for June are expecting a sideways trend at best, slight downtrend at worst, and without raw material costs bolstering an uptrend, domestic rebar prices will be lucky to maintain at current levels by next month.
As such, barring a surprise surge in demand or other unexpected event in the market, spot prices will most likely hover in the still-wide range of $29.00-$34.00 cwt. ($580-$680/nt or $639-$750/mt) ex-mill, although it should be noted that prices rose by $0.50 cwt. ($10/nt or $11/mt) on the low end in the last week, reflecting diminished opportunities for dealmaking.