Deep discounts on US domestic merchant bar have permeated the market, although so far it does not seem if US mills will make anything official.
In order to reflect a semblance of stability in the face of a slightly downtrending scrap market, US long product mills announced neutral transaction pricing for rebar, beam and merchant bar prices for November. However, unlike other products that have held onto steady spot pricing as of late, the merchant bar market has been marked with aggressive discounting in the last month, with transactions heard of at least $2.00 cwt. ($44/mt or $40/nt) underneath published prices, and often lower. However, because the practice is so widespread, there is not much of an incentive for US mills to make the lower prices "official," and published prices still stand at $45.30-$50.50 cwt. ($999-$1,113/mt or $906-$1,010/nt) ex-mill, depending on size and shape.
Part of the reason mills can afford to cut such incredible deals is the growing trend of shifting the production ratio more toward merchant bar than rebar, considering that merchant bar is much more profitable to make. The production shift is not based, however, on stronger demand for merchant bar. Sources tell SteelOrbis that demand has been spotty lately, and instead of stocking up on low-priced material, many distributors are sticking to filling inventory holes.
They are also wary of imports, even though Turkish merchant bar offers to the US have dropped in the last month by approximately $2.00 cwt. ($44/mt or $40/nt). While imported merchant bar is typically only of interest to those looking for specialty sizes, sources tell SteelOrbis that US buyers are not sure what their own customers will demand--or domestic prices will be--in early Q1 when orders booked today arrive, so the new Turkish import offer range of $43.00-$45.00 cwt. ($948-$992/mt or $860-$900/nt) DDP load truck at US Gulf ports will not likely gain much interest for the moment.
As for newly-arriving imports, October seems to be following September's downward trend for merchant bar. According to license data from US Steel Import Monitoring and Analysis System (SIMA), the US imported 7,262 mt of merchant bar in September, down from 8,317 mt in August, and it looks like October's decline will be even steeper. Through October 13, the US has only imported 2,781 mt of merchant bar this month, and considering that there was no evident bump in import orders a few months ago, it is unlikely that October levels will meet September's total, especially when sources such as Korea, which made a showing in September, has not contributed anything toward import totals this month. As for other sources, the US' NAFTA partners continue to dominate the top two spots, with Turkey trailing significantly behind.