The slight fall of US domestic rebar prices this week have left market players wondering what will happen in other markets. As rebar and merchant bars are both construction-related products, some buyers believe the rebar price drop spells bad news for the merchant bar market, while others feel that the merchant bar market is a bit stronger than the rebar market and do not expect a price decrease for merchant bars.
The announcement is expected very soon, though Nucor's sales people are pretty tight lipped about telling what Nucor's next pricing decision will be for merchant bars and wide flange beams. With scrap increasing just slightly this month, Nucor may keep merchant bar prices stable, understanding that the market, while being more steady than the rebar market, probably isn't strong enough to handle a price increase at this time. This situation seems to be what most market players are expecting: neutrality. Sources say that since scrap prices didn't increase too much and the market is relatively soft, it only makes sense for the mills to keep prices flat and absorb the raw material cost increase. This way of interpreting the market, however, isn't agreed upon by everyone. Some sources predict that merchant bar prices will slip right along with rebar because the markets are not that different from each other.
Throughout the month of August at least, merchant bar prices are ranging from $33.35 cwt. to $41.05 cwt. ($735 /mt to $905 /mt or $667 /nt to $821 /nt), depending on size, shape and thickness. Despite the slight rise in shredded scrap prices, the domestic merchant bar pricing trend is slightly down as prices may slip or, at best, stay neutral for September shipments.
The import market is decent, however it is less competitive as prices have been inching closer to domestic numbers. Chinese mills were upping prices to make up for the ten percent export tax that the Chinese government implemented back in June. In the short span of two months, offering prices went up by approximately $3.00 cwt. ($66 /mt or $60 /nt) but have now flattened out and are stable, at least for this week.
Chinese offering prices are now in the range of $38.00 cwt. to $39.50 cwt. ($838 /mt to $871 /mt or $760 /nt to $790 /nt) FOB loaded-truck, at Gulf and West Coast ports.
Despite the softening domestic rebar and billet prices in Taiwan, increasing freight rates kept US offering prices the same since our last report of two weeks ago. Offers are still ranging from $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt) FOB loaded-truck, at Gulf and West Coast ports, though they are more dominant on the West Coast.
After about a month of softening billet prices, and in turn softening Turkish merchant bar prices, the import market evened itself out, with prices stabilizing for approximately one month. Now billet prices are moving again, but this time in the opposite direction: up. In the past two weeks, Turkish billet prices have jumped by at least $25.00 /mt ($1.13 cwt. or $23.00 /nt) and are now pushing merchant bar prices up by approximately $0.50 cwt. ($11 /mt or $10 /nt). Merchant bar producers in Turkey are hesitant to offer exports for now since billet prices have the tendency to increase very rapidly.
Turkish merchant bar offerings are now in the range of $35.50 cwt. to $36.50 cwt. ($783 /mt to $805 /mt or $710 /nt to $730 /nt) FOB loaded-truck, US Gulf ports.