While US domestic rebar mills are reportedly trying to keep the market from plummeting by reducing rebar transaction prices by a little more than half of the shredded scrap price decrease, sources tell SteelOrbis that mills are under pressure from a lackluster demand market and might be forced to make deals under the new spot range. Following the immediate $1.50 cwt. ($33/mt or $30/nt) drop in rebar prices (Gerdau revised their original decrease to match Nucor's this week), spot prices are now $33.75-$34.75 cwt. ($744-$766/mt or $675-$695/nt) ex-mill. But considering that the raw materials surcharge for rebar declined by $2.90 cwt. ($64/mt or $58/nt), there is room for spot prices to drop further.
Another factor putting pressure on US rebar spot prices is a softening import market. Scrap prices in Turkey are still experiencing a downtrend, and offer prices in the range of $30.50-$31.50 cwt. ($672-$694/mt or $610-$630/nt) DDP loaded truck in US Gulf ports--unchanged in the last week--are expected to drop, especially if Turkish mills want to book last-minute orders before closing down for Ramadan next month. Meanwhile, Mexican mills followed the US price trend by lowering their general import offer range to $30.50-$31.50 cwt. DDP loaded truck delivered to US border states, down $1.25 cwt. ($28/mt or $25/nt) since last week. Although demand for rebar in the US is not strong, traders tell SteelOrbis that the combination of quick lead times from Mexico and prices that match Turkish offers could be attractive enough for reluctant US buyers to bite.