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Long products hike gives imports shot in arm

Keywords: Tags  imports, long products, steel, rebar, wire rod, Nucor, traders, China Catherine Ngai

NEW YORK — Strength in the long steel products import market seems to have carried beyond the first few months of the year, with traders and buyers saying that attractive foreign prices have allowed for ongoing deals even in a fragile marketplace.

"Business is OK, but it isn’t gangbusters," one trader said. "Buyers are kind of going hand to mouth. We’re picking up orders, but we’re not booking huge vessels. For the most part, people are doing OK. This year has definitely been better than last."

Imports of reinforcing bar (rebar) and wire rod historically see stronger volumes at the start of the year due to expected price hikes in the first quarter on scrap shortages, with volumes tapering off into the summer. But this year seems to have bucked that trend, sources said, with buyers continuing to make purchases for shipment through the summer.

Imports of rebar and rod have been fairly steady in recent weeks on the back of higher U.S. prices, sources said. A number of domestic mills recently hiked rod by $35 to $40 per ton and rebar by $25 per ton, although they have since eased off the rebar hike by retracting the increase by some $10 per ton (, April 11).

Still, as domestic mills push for higher prices it seems to have created an opening for foreign material, traders said.

"There was a shot in the arm (for foreign product) when the (domestic) mills raised prices in March," another trader said. "That really helped boost business."

Rebar imports were booked for June-July arrival at between $580 and $600 per ton ($29 to $30 per hundredweight) c.i.f. Port of Houston this past week, sources said, compared with domestic prices around $680 per ton ($34 per cwt). Sources also said that material from Turkey continues to be attractive.

"The spread between imported and domestic is better than what it was last year," a rebar distributor said. "We’ve seen a lot less Mexican bar lately but a lot more Turkish. When the spread is between $20 and $40 (per ton), you get a lot of people who don’t want to gamble. When that number goes over $40—like it is right now—people will buy."

Some 112,070 tonnes of rebar were set to arrive on U.S. shores in March, according to import license application data from the Commerce Department’s Import Administration, up 50.3 percent from 74,584 tonnes the previous month and 14 percent higher than 98,276 tonnes in March 2012.

Rebar, which traditionally feeds into the construction market, has seen steady and stable growth. Nucor Corp. president and chief executive officer John Ferriola said the Charlotte, N.C.-based steelmaker anticipates a slightly better nonresidential construction environment in 2013 on the back of stronger housing starts (, April 18).

Wire rod imports also have seen continued strength, with players reporting current bookings for July-August arrival at $575 to $590 per ton ($28.75 to $29.50 per cwt) c.i.f. Port of Houston compared with domestic prices around $690 per ton ($34.50 per cwt).

"For us, business has been steady. There is plenty of (foreign) rod out there and we don’t have any issues with regards to getting steel," a wire rod buyer said. "We’ve just booked steel for August and September ... and we found the offers to be competitively priced."

Some 54,158 tonnes of wire rod were poised to arrive in March, flat with imports in February. Market participants have said, though, that much of the Chinese rod that has arrived in the United States was actually listed as hot-rolled bar, which totaled 40,908 tonnes in March—nearly double China’s February figure of 20,786 tonnes.

"Business levels have been relatively stable," the first trader said. "Chinese material looks to be coming in at a steady pace."

But despite continued stability and strength in the market, traders said the outlook remains fragile.

"The good news is that there is demand. We’re selling," a third trader said. "The bad news is that there are too many players in the market and margins are soft."

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