US rebar prices rising sooner than increase effective date

Thursday, 15 November 2012 00:13:49 (GMT+3)   |   San Diego
       

In yet another battle for domination in the US domestic rebar market, Gerdau Long Steel North America announced a rebar transaction price increase this week to match Nucor's, although instead of waiting for December 1 to go into effect, Gerdau proclaimed the increase to be immediate.  However, sources say that the move will not set Gerdau apart as much as it may have wished, as Nucor is currently out of several common sizes, meaning that customers will have to wait until December anyhow, bypassing any opportunity to hedge buy against the increase.  Therefore, spot prices in general have already increased this week, into the range of $33.50-$34.50 cwt. ($739-$761/mt or $670-$690/nt) ex-mill, reflecting a $1.00 cwt. ($22/mt or $20/nt) boost from last week.  However, some unavailable rebar sizes have already seen the full $1.75 cwt. ($39/mt or $35/nt) increase announced by both mills. 

As for imports, offer prices from both Turkey and Mexico have also increased in the last week, following a continued uptrend in the Turkish longs market and Mexico's usual attempt to follow US price moves.  Turkish offer prices are now in the range of $31.50-$32.50 cwt. ($694-$717/mt or $630-$650/nt) DDP loaded truck in US Gulf ports, while Mexican offers are ranging from $30.50-$31.50 cwt. ($672-$694/mt or $610-$630/nt) DDP loaded truck delivered to US border states--both reflecting a $1.00 cwt. increase from last week.  Considering that both sources have only moderately increased prices compared to US domestic spots, traders report a slight increase in inquiry activity for imports.


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