US rebar imports decline as availability improves from domestic mills and at the ports

Highlights

Demand uncertainties still limiting spot buys

Shredded scrap prices rise $30/lt

US imports for consumption of concrete reinforcing bars totaled 56,798 mt in November, down 34.5% from October, according to the most recent US Census data.

Imports are expected to remain limited as buyers continued to pass on foreign offers for larger tonnage due to uncertainties around demand and domestic prices, which shorter lead times have allowed.

As mills have come out bidding January shredded scrap prices up $30/lt from December levels some distributors and fabricators see room for a possible increase by the domestic mills.

While others see better availability for most products at the mills and “lukewarm” demand keeping the mills from increasing prices for the first quarter.

With foreign input costs increasing especially in Turkey, FOB prices have risen significantly and have currently priced them out of the US market.

“Current price levels is a sweet spot for the domestic mills as imports have been limited,” a Southeast distributor said

Some foreign mills have faced increased energy costs and scrap prices as they started to restock raw materials.

Distributors have seen good availability at most mills with only sporadic out of stock on certain products.

Some long products mills said that rising scrap prices should help put a floor on prices but “lukewarm” demand could change that.

The top three countries the US imported from were Mexico, with 24,397 mt; Algeria, with 13,308 mt; and Turkey, with 9,321 mt.

Imports from Turkey were seen mainly in San Juan, Puerto Rico, and Houston.

Imports from Algeria all landed in Philadelphia during the month.

From January through November, US imports totaled nearly 1.251 million mt, up 9.05% year on year.

Philadelphia again saw the majority of imports, with 13,308 mt landing in the region during the month, followed by Loredo, Texas, at 11,335 mt, and Miami with 5,047 mt coming in, which rounded out the top three districts for mainland US.

Traders and buyers in Houston and Florida have seen stocks at the ports starting to rise after drawing significantly over the past month as prices have fallen $215/st in the South from the high last seen June 24. Domestic prices in Florida have fallen by $130 since the end of August.

Few new future arrival offers were heard as Platts DDP Houston was last assessed at $840/st just below a recent offer from Algeria around the $850/st level for February shipments as buyers passed despite lower prices because of uncertainties in the market. Prices from Mexico were last heard around the $850/st level as well.

Spot offers at the ports in Houston and Tampa have moved down to $875-$890/st, loaded truck, as domestic mill offers in Texas were last heard offered around the $955/st level, depending on mill location and in Florida offers were seen around the $830-$840/st level

According to data from Panjiva, the trade analysis unit of S&P Global Market Intelligence, mainly Algerian shipments were seen entering the US, most recently 12,718 mt was seen entering Port Everglades, Florida Dec. 31, and previously during December, a vessel dropped 6,221 mt in Port Everglades, then 14,561 mt into Houston and 2,743 mt into New Orleans all from Algeria.

Most buyers were still focused on inventories as they were still unsure of the demand picture for the first half of 2023 while others expect strong demand from infrastructure bills and felt activity could pick up as the rate of the rise in interest rates tapered off, especially starting in the second quarter.

Rebar mill margins are still around 36% higher, depending on region, than they were the last time shredded scrap prices were at these levels in early February 2021 but down 7% from September 2022 levels when shredded prices were still declining, although other input costs have risen significantly in that time since 2021 and buyers felt prices won’t fall to pre-pandemic levels as mills have consolidated scrap processors.

Platts last assessed US Southeast rebar at $940-$950/st Jan. 6, with US Midwest rebar also at $940-$950/st, also unchanged, according to S&P Global Commodity Insights.

All prices are on an ex-works basis.