US merchant bar mills might move to clean up discounting in market

Friday, 13 July 2012 01:50:41 (GMT+3)   |  
       

US domestic merchant bar spot prices have consistently trended beneath published prices this year, with mills offering discounts anywhere between $1.00-$3.00 cwt. ($22-$66/mt or $20-$60/nt).  However, after two months of deep scrap price drops, sources say mills are not willing to let prices slip any further on merchant bar--in fact, some mills might make a move to clean up much of the prevalent discounting.  Therefore, US longs mills are expected to announce different price moves for different products--rebar will likely see a decent drop in transaction prices, while merchant bar prices will only decrease slightly, if at all; sources tell SteelOrbis there's a chance mills could go sideways with merchant bar prices, which would increase their margins in light of the lower raw material costs.  For now, published merchant bar prices remain in the range of $44.55-$49.75 cwt. ($982-$1,107/mt or $891-$1,005/nt) ex-mill, with actual transactions relatively far below.

As for imports, distributors are fairly interested in available offers, although actual booking activity is not that strong--US customers are only buying the amount of merchant bar they need for existing projects, so smaller domestic orders are currently more preferable to the larger orders required for imported product.  As such, Turkish import offer prices have not changed much in the last month, fluctuating here and there but ultimately settling back at last month's range of $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) DDP loaded truck at US Gulf ports.


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