US rebar: Domestic pressured by weak demand

US rebar remained steady this week, while the spread between domestic and imported rebar tightened.

Rebar ex-works Midwest remained at $900-920/short ton (st) from last week, while rebar import ddp Houston rose to $880-920/st from $860-880/st.

Domestic rebar demand showed signs of softening this week and lead times were heard to shorten. While murmurings of an expected price increase in the coming weeks were in the market, a major producer offered lower prices to some customers.

Already low construction demand is being further pressured by rising interest rates and economic uncertainty. Relief expected by the Infrastructure Investment and Jobs Act has yet to materialize, with one market participant saying that there is currently no sign of any heightened demand in bidding.

Negotiations in the domestic ferrous scrap trade kicked off Thursday with Detroit-area mills bidding primes and obsoletes up $20/gross ton (gt) from January levels. These numbers have not been concluded and were heavily resisted by suppliers in the region, who are targeting increases of as much as $30-40/gt particularly for shredded and primes grades of scrap. Recent price patterns, however, show rebar prices decoupling from raw materials, as producers have little motivation to increase selling prices, despite the possibility of increasing production costs.

Imported volumes were assessed higher this week, further weakening the appetite for imported tonnages in the US. Turkish producers continued to raise prices this week, narrowing the spread between imported and domestic product.

December construction spending figures were released this week by the US Department of Commerce, reporting that total spending dropped to $1.809tn form $1.817tn in November. Public and private non-residential construction, the primary consumer of rebar, fell to $73.3bn in December from $79.7bn the month prior.