Import rebar prices in the US have come down by another couple of dollars in the last week due to the slow demand and increasingly lower prices offered from foreign mills.
Spot prices in the US for import rebar have declined by $2.00 cwt. ($44 /mt or $40 /nt) since last week, with most offers now ranging from $42.00 cwt. to $43.00 cwt. ($926 /mt to $948 /mt or $840 /nt to $860 /nt) duty-paid, FOB loaded truck in US Gulf ports.
Offers from Mexican mills also range from $42.00 cwt. to $43.00 cwt. delivered to Houston. Sources say that due to Mexico's weak domestic demand and mills' overbuilt floor stocks, Mexican mills can ship immediately and will ship to almost any region in the US and cover most of the freight cost. Still, there is very little interest in these competitive offers, as customers are waiting for prices to fall further. Also, the recent financial turmoil will keep buyers on the fence, even if they may need to replenish their inventories.
Turkish mills also continue to offer rebar to the US at very low prices due to their rapidly declining domestic prices. Again, though, there is very little interest from US buyers. Some traders still have unsold positions coming from Mexico and Japan, but most are not offering to customers yet since they would have to sell the material at a loss and would rather wait for the market to rebound.
Rather than making sales, many traders are busy trying to settle claims and avoid cancellations. As one Gulf-region longs trader told SteelOrbis this week, "It is a really ugly market for trading companies right now."
On the domestic side, prices have generally remained stable in the last week, with most offers ranging from $46.25 cwt. to $46.75 cwt. ($1,020 /mt to $1,031 /mt or $925 /nt to $935 /nt) ex-mill (smaller sizes still carry significant extras). There is still pressure for domestic mills to lower prices further, though, since import offers are well below the domestic price level.
While officially Nucor said it will keep prices stable through October, it will be especially hard for domestic mills to keep prices stable with Mexican mills offering for immediate delivery at equal or more competitive prices, depending on the region.
On the bright side, customer inventories are not high, so there is a good chance that once the market does start to recover, the pricing trend will quickly turn around. As of yet, though, it is still not clear when the market will bottom out.
Preliminary Census Data from the Steel Import Monitoring and Analysis System (SIMA) show that in August rebar imports to the US totaled 75,177 mt, with most tonnage coming from Japan, at 37,355 mt, and Mexico, at 35,323 mt. Some import tons also came from the United Kingdom, at 1,930 mt; Canada, at 314 mt; and Germany, at 238 mt.