Once again, the annual mega event in Las Vegas this year was frequented by rebar traders, distributors, fabricators and producers, both foreign and domestic. The main discussion points among the attendees are the record rebar prices and recession worries for the US economy. The questions on everyone's mind are: Will rebar prices gain more upward momentum despite the less-than-strong consumption level? And when will this upward trend possibly turn around?
Most rebar professionals are worried about the upcoming months. Import rebar offering prices to the US have increased again in the past week, and with cheaper US domestic material no longer available, buyers are starting to pay the higher import prices.
Traders' offering prices for US customers have increased by approximately $1.00 cwt. ($22 /mt or $20 /nt) to a level of $35.50 cwt. to $36.50 cwt. ($783 /mt to $805 /mt or $710 /nt to $730 /nt) FOB, loaded truck, in Houston.
There have reportedly been some deals fixed at these levels with Turkey, which is virtually the only import rebar source currently offering to the US. The pricing trend for import rebar is still strongly up, since Turkish mills are raising their numbers again to mirror the $80 /nt ($88 /mt or $4.00 cwt.) price increase that US mills announced for February shipments (including both the higher RMS and the foreign fighter discount elimination).
Based on the CFR numbers that Turkish mills are currently offering, traders will soon have to raise their prices for US customers by at least another $1.50 cwt. ($33 /mt or $30 /nt) in order to make any money. By now, quite a few tons from Turkey have been purchased by multiple trading companies, and traders are hoping the US market will soon accept the new pricing level.
In the meantime, while domestic prices are still very competitive with new and future import offers, distributors are seeing some controlled order entry from domestic mills, which mills are doing in order to avoid overbooking. This, in turn, is encouraging buyers to look at import options even though the import prices are by in large higher than the domestic numbers.
License data from the US Import Administration show that import rebar arrivals to the US in December 2007 totaled 51,492 mt, with the vast majority of the material (45,139 mt) coming from Mexico. Tonnages from other sources were very limited. After Mexico, the next largest import sources in December were: Brazil, at 2,015 mt; Trinidad & Tobago, at 1,380 mt; Canada, at 1,138 mt; and Dominican Republic, at 1,072 mt. In the absence of Asian imports, Mexico emerged as a significant import source for both rail and truck shipments across the border and some sea-bound shipments to the US Gulf.
On the domestic side, the February price increases announced last week are expected to stick, and there has not been much complaining heard in the market (compared to the complaints heard from wire drawers). It seems that foreign import sources and Mexican mills are closely watching the domestic price developments and mimicking the increases that have been observed in the last few weeks.
Domestic numbers for February shipments range from approximately $36.15 cwt. to $36.65 cwt. ($797 /mt to $808/mt or $723 /nt to $733 /nt) FOB mill.
SteelOrbis is attending the World of Concrete Expo with a booth located in the North Hall. Our booth number is N3265. SteelOrbis representatives will be happy to connect with members and readers.