On the heels of the large economic stimulus announced by the Chinese government, the rebar and wire rod prices went up $50-$60 /mt in a week's span. Iron ore and coking coal went up 12%, the largest daily increase in many years. There is no doubt that the Chinese futures market has a lot to do with these huge increases. In North America, we are not as dialed into steel futures markets as much as the steel mills and consumers are in Asia. What's more, these types of instruments are traded generally by non-steel people and any government announcement makes a huge impact in the short term. But at the end, real supply and demand find its real equilibrium.
Still, for many months the sentiment was so negative, Asian physical and future market participants have been mostly shorting, that is selling before buying the products. Now the market has turned significantly, short sellers will need to hurry up and buy the products they have sold already. That will create its short term strong demand and this rally may go on for a few more weeks or months.
In the meantime, in North America we are not seeing any signs of this irrational exuberance that is happening in South East Asia. Hot rolled coils and other long products are happily boring and stable in the US. Unless we catch the Asian wildfire here, there shouldn't be any reason for price increases overall for October or even for November. Scrap is sort of sideways too but no doubt it can get influenced by the strong iron ore gains and start moving the costs up here.
Most American steel consumers are operating with very lean inventories, with nothing in the import pipeline and even small bumps of demand may create big price increases and shortages in the short run. There are no safety stocks and there is too much faith in the North American supply. This could prove to be a recipe for disaster, once again. | 
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