Will a scrap downtick make the US rebar market vulnerable to deals?

Thursday, 05 April 2012 16:16:25 (GMT+3)   |  

Even though several indicators point toward a $5-$10/long ton decrease in shredded scrap prices this month, US domestic rebar mills will probably keep transaction prices neutral for May shipments.  However, sources tell SteelOrbis that a slight downtick in scrap could open the market back up to deals below the general spot range, which had been drying up in the last couple weeks.  Mills' largest customers might still be able to get up to $0.75 cwt. ($17/mt or $15/nt) off the current spot range of $36.75-$37.75 cwt. ($810-$832/mt or $735-$755/nt) ex-mill, but with scrap weak, even mid-size customers will have some leverage to book at prices slightly below.

As for imports, traders have slightly lowered their offers for Turkish rebar, even though Turkish mills haven't made any moves in their offers to the US (although it should be noted that prices have bottomed this week in Turkey's domestic market before rebounding again towards Thursday).  New import offer prices now range from $33.50-$34.50 cwt. ($739-$761/mt or $670-$690/nt) DDP loaded truck in US Gulf ports, down $0.50 cwt. ($11/mt or $10/nt) from last week.  Meanwhile, Mexican rebar mills are reportedly itching to lower prices in response to tepid demand from the US, but they are wary of anti-dumping suits and for now have kept their offer price range at $33.00-$34.00 cwt. ($728-$750/mt or $660-$680/nt) DDP loaded truck delivered to US border states.

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