Ostensibly, the reasoning behind US domestic merchant bar mills' drastic $2.50 cwt. ($55/mt or $50/nt) transaction price decrease announced this month was to clean up another round of rampant discounting in the market. While sources agree that the move was welcome (and small- to medium-sized distributors report increased activity), some don't believe the price drop was large enough. Spot pricing is "all over the place," with some distributors still paying underneath the new published price of $37.35-$38.80 cwt. ($823-$855/mt or $747-$776/nt) ex-mill (depending on size and shape), and some paying slightly over in regions where supply is tight. For instance, one mill's recent computer system glitch has wreaked havoc on order flow, giving other mills the opportunity to step up and fill the gaps.
Another reason sources believe the $2.50 cwt. decrease could've gone further is due to rumblings of low import deals that could spur mills to offer quiet "foreign fighter" pricing to select customers. While most import merchant bar offers from Turkey are still in the range of $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt), DDP loaded truck at US Gulf ports for specialty sizes and shapes, traders confirm that some offers have been heard slightly lower. Although such offers have not materialized yet into actual orders, US mills have their guard up and are reportedly ready to respond if necessary.