Commercial Metals Company President and CEO Joe Alvarado is keeping an eye on Chinese steelmaking overcapacity and how it could manifest in the US longs market -- possibly with Korean rebar imports, Alvarado said Thursday. 

Demand in the Chinese market is soft and this is having a spill over effect in the export market, he said during the company's fiscal third quarter earnings call. 

"We've seen some imports, for example, from Korea -- rebar on the West Coast -- and had not seen rebar imports from Korea for a long time," Alvarado said. "And I suspect that that may be partly because they're getting squeezed by the Chinese and the Southeast Asian markets they might otherwise be serving."

Alvarado said he didn't want to speculate but noted that CMC is monitoring the Chinese market closely. 

"They continue to operate at even what we know are very low prices while still paying up for iron ore," he said. "It's not a scenario that makes economic sense, but they continue to ship and it pressures the market."

A US-based rebar trader said Wednesday that Korean mills are making a play for the US market once again. The trader said it's hard for new foreign mills to enter the US market because main exporting mills are "influential," but still the Korean mills have gotten "pretty aggressive" on the West Coast.

The US has licenses to import 6,962 mt of Korean rebar in June, according to Department of Commerce data. The average unit value of the Korean rebar licensed to be imported in June was $582/mt, compared to $593/mt for Turkish rebar and $621/mt for Mexican rebar -- the two largest players in the US rebar import market -- in the same month.

Aside from the 4,311 mt of Korean rebar imported in January, there were no Korean imports from 2006 to date, according to DOC data pulled by Platts Steel Data & Analysis. 

After a sunset review, the US International Trade Commission in 2007 revoked antidumping rates of 12% for Korea Iron and Steel, 102% for Hanbo and Dongil and 23% for all others, except Dongkuk, which had a 0% margin.

Pittsburgh (Platts)--27Jun2013/245 pm EDT/1845 GMT

By Estelle Tran

Edited by Richard Rubin

Source: platts.com