US domestic, import rebar prices move up heading into 2020

Prices for steel reinforcing bar in the United States ticked up following increase announcements from several domestic mills, and sources expect that uptrend will continue next year if ferrous scrap values move up as anticipated in the January 2020 trade.

Fastmarkets assessed the price for steel reinforcing bar (rebar), fob mill US at $29.50-30.50 per hundredweight ($590-610 per short ton) on Wednesday December 18, an increase of 0.8% from $29.50-30 per cwt on December 4 but still off by 15.5% from $35-36 per cwt one year ago. 

Lead times for domestic rebar ranged from four to five weeks, according to market participants.

Fastmarkets’ assessment for steel reinforcing bar (rebar), import, ddp Houston rose to $595-605 per ton on Wednesday from $570-590 per ton previously.

US overview
Earlier this month, domestic steelmakers announced $30-per-ton ($1.50-per-cwt) price increases, which sources said have been successful in raising rebar spot prices.

“The mills are being very firm and stiff on it,” one rebar consumer said.

And domestic pricing should receive additional support on the raw materials front, with some sources predicting that ferrous scrap prices could climb a further $20 per gross ton next month.

“I don’t see any slowdown throughout the first quarter,” the rebar consumer said, pointing to strength in the fabrication business. “I have a lot of confidence we’ll stay busy through the second quarter.”

Added a mill source: “Business is okay for this time of year.” 

Still, other sources questioned the ultimate staying power of the pricing uptrend.

While a trader agreed that domestic prices have risen, that source said the uptrend was a result of the mill hikes rather driven by market fundamentals. Still, buying activity may pick up while buyers believe the price is at a floor, ahead of the seasonal demand uptick typically seen in mid-February to March.

“[Mills] are trying to go up $10 [per short] ton out of the $30 [per] ton increase,” a buyer source said. “However, I don’t see increases having much to stand on as we go into 2020. Demand has been relatively soft in general.”

A second buyer did not expect the full $30-per-ton increase to stick, noting that “even with decent demand, there’s too much inventory and capacity right now.”

As of Tuesday December 17, only 12,858 tonnes of foreign rebar had been cleared for entry into the United States, according to the latest license data from the US Department of Commerce’s Enforcement and Compliance division.

If foreign material continues to arrive at that rate, the December total would be 23,447 tonnes – 53.6% short of November’s 50,586 tonnes, according to Fastmarkets’ calculations.

A second trader indicated that foreign rebar remains of limited interest to domestic buyers.

“There’s a lot of wiggle room, [and] domestic prices need to increase again before imports make sense,” he said.

So far this month, the top three suppliers to the domestic market were Mexico, Canada and South Korea at 7,455 tonnes, 2,705 tonnes and 2,066 tonnes respectively.

According to import market sources, a cargo containing 20,000-25,000 tonnes of rebar is currently being loaded in Turkey and is slated to depart for the Port of Houston by the end of this month.

Upon arrival in the US, some of that material will be offered to the market for a loaded-truck price of $30.50 per cwt; the remainder, which was pre-sold, was booked at a price of $29.75-30 per cwt, sources said.

Prices for material currently available at the Port of Houston stand at around $30 per cwt on a loaded-truck basis.