The raw materials-driven merchant bar market pushed domestic mills to increase prices for October shipments; however, scrap prices have leveled off and merchant bar prices are expected to remain flat throughout November.
October shredded scrap prices are trending sideways, and merchant bar demand is decent at best, leaving little room for domestic mills to increase prices for a second month in a row. On the other hand, imports are minimal which leaves domestic mills at an advantage. With not much offshore competition, domestic mills have the upper hand. If demand or scrap prices increase even slightly, domestic mills can raise prices without much argument from buyers.
Current domestic prices are in the range of $33.85 cwt. to $41.55 cwt. ($735 /mt to $905 /mt or $667 /nt to $821 /nt), depending on size, shape and thickness. The pricing trend is flat as prices are expected to remain stable throughout November.
Even though November may not look as promising, buyers are hopeful for the first quarter of the new year. There is a feeing of optimism in the market and the belief is that demand will improve.
Import prices are trending upwards, one of the reasons why they are practically absent from the US market. Chinese offers have continued to go up, though hardly any buyer has an interest in recently tarnished Chinese products.
Taiwanese offers have remained the same since our last report two weeks ago, but like all Asian markets, billets and long product prices have been going up in Taiwan as well. So far they have dominated the West Coast market but are now once again absent in the Gulf Region. Brazilian offers have been more visible in the Gulf with more attractive prices, leaving no room for Taiwanese offers. Plus, Taiwanese structural sizes are still too close to or higher than the domestic prices.
Taiwanese 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. Offers from Taiwan and Asia in general are trending up due to rising billet and freight costs.
In Turkey, billet prices have decreased, however freight rates are at an all-time high, forcing Turkish merchant bar mills to keep prices level instead of reducing their prices. With the freight rates so high and the lack of ships available, Turkish mills are now turning to container shipments for smaller quantities as opposed to the usual break-bulk shipping methods.
Turkish offers are ranging from $36.50 cwt. to $37.50 cwt. ($805 /mt to $829 /mt or $730 /nt to $750 /nt) FOB loaded-truck, US Gulf ports.
Mexican mills continue to ship to the US mainly to Texas and California, occasionally with good prices, but mostly close to domestic levels. Also, reliability of Mexican orders remains a major issue in buyers' eyes.
Data from the US Import Administration shows that for the months of August and September, Turkey was absent from the US market. China and Taiwan also showed very little export tonnage to the US with figures of 236 mt and 629 mt respectively. The three active players in the US import market were Canada at 12,785 mt, Mexico at 6,092 mt, and Brazil at 5,307 mt. The data is for light sections of carbon and alloy steel, U, I, L, T and H shapes of 3" or smaller (does not include rounds, squares, or flats).