US rebar prices continue to slip as mills cut more deals to try to fill their order books.
After dropping by about $1.00 cwt. ($22/mt or $20/nt) since last week, most domestic rebar offers in the US market now range from approximately $22.00 cwt. to $22.50 cwt. ($485/mt to $496/mt or $430/nt to $450/nt) ex-mill. Furthermore, mill-affiliated fabricators are even to get even better deals, including some reported offers under $22.00 cwt., and price protection for up to a year and perhaps beyond.
What's more, US scrap prices are expected to drop this month, and along with them, the raw materials surcharge that goes into the effective price of rebar. The extraordinarily quiet rebar market is not helping either. US rebar demand remains very soft and is not expected to improve before early next year at the soonest. Therefore, downward pressure remains on domestic rebar prices.
The other main long product, wire rod, continues to fare better than rebar, with better prices than rebar, in part because there is more production of rebar in the US, and imports from Mexico are also an option. And whereas wire rod has many applications, rebar is restricted to mostly concrete reinforcing applications.
US rebar mills may reflect the latest spot price decrease, or announce an even larger drop by means of an official transaction price decrease issued after November scrap prices are out; or, they may hunker down for the rest of the year and officially keep prices stable while continuing to quietly cut deals at sub-list prices. Either way, it is unlikely that domestic rebar prices have reached their floor for the year quite yet.
Mexican rebar offers to the US have also dropped further since last week, with most offers now ranging from approximately $21.50 cwt. to $22.50 cwt. ($474/mt to $495/mt or $430/nt to $450/nt) delivered to Texas. With Mexico's domestic rebar market also being soft, Mexican mills are also reportedly becoming increasingly willing to cut deals for larger tonnage orders.
Turkish longs mills, however, are a slightly different story. They have recently become more reluctant to lower their export offer prices as they are not seeing enough relief in their ex-CIS billet costs in order to decrease their rebar offers. In fact, some mills even made a slight upward adjustment to their export rebar offers last week. Nevertheless, Turkey's export demand for rebar, overall, remains quiet as ever and in order to get some orders from the US, they will likely need to follow the downward trend of the US market.
Even with Turkish mills' latest price moves, the overall price trend for import rebar offers to the US remains slightly down, due to the aforementioned weak demand, decreasing scrap prices and end-of-the-year seasonal factors affecting the US and most other markets.