Although domestic spot prices for rebar will likely continue to soften in line with the frozen winter demand levels, US mills will not officially lower their rebar transaction prices in December.
With the Raw Materials Surcharge (RMS) applicable to Nucor's long products decreasing by $25/nt ($1.25 cwt. or $28/mt) for December and some price deterioration already taking place in US rebar spot pricing in recent weeks, Nucor informed customers this week that it will keep December rebar transaction prices unchanged by raising base prices by $25/nt. Nevertheless, with the US rebar demand remaining unquestionably slow, this does not necessarily mean that mills will not continue to cut deals in order to fill their books as the fourth quarter progresses.
For now, most domestic rebar offers continue to range from $22.00 cwt. to $22.50 cwt. ($485/mt to $496/mt or $440/nt to $450/nt) ex-mill, although there are heard to be some deals at under $22.00 cwt., with mill-affiliated fabricators continuing to receive especially good discounts. The pricing trend remains slightly down, since, with the weak demand and some increasingly attractive import offers from Mexico, domestic pricing remains under pressure. There is also early speculation that US scrap prices could decrease further in December.
Import offers from Mexico have dropped by approximately $0.50 cwt. ($11/mt or $10/nt) since last week with most offers now ranging from $21.00 cwt. to $22.00 cwt. ($463/mt to $485/mt or $420/nt to $440/nt) delivered to Houston. However, as with domestic offers, there is often ample room for negotiation, with some recent bookings heard to have taken place at under $21.00 cwt.
Turkey remains a different story with Turkish offers becoming less competitive with Mexican offers in recent weeks. Turkish mills' price expectations are now several dollars per hundredweight higher than those of their Mexican counterparts, as producers in the region have seen some minor increases to scrap and billet prices this month. Most Turkish offers continue to range from approximately $24.75 cwt. to $25.75 cwt. ($546/mt to $568/mt or $495/nt to $515/nt) duty-paid, FOB loaded truck in US Gulf ports. Export demand for Turkish rebar remains pretty bleak, though mills which also produce rebar have been trying to piggyback some rebar bookings with wire rod shipments, offering to ship a variety of sizes and lengths (including 60-footers) of rebar along wire rod orders. However, the tonnage of such rebar bookings remains very light.
With Turkey being, for all intents and purposes, out of the US import rebar market currently, the overall price trend for import rebar remains slightly down, based on the downward pressure on import Mexican rebar offers. That said, both US and import offers, while still trending down, are likely close to bottoming out for the year since by next month some optimism will likely start to develop for the first quarter of next year.