Steady merchant bar demand is helping domestic mills hold firm to official asking prices, even as competitively-priced imports penetrate the market.
As with most other long products, domestic merchant bar mills left asking prices unchanged for April shipments, an expected move following the sideways scrap pricing trend this month. Mills have found little to no resistance getting asking prices in the range of $45.30-$50.50 cwt. ($999-$1,113/mt or $906-$1,010/nt) ex-mill, depending on size and shape, attributed mostly to steady demand from the agricultural equipment and other manufacturing industries.
Current published prices for merchant bar (ASTM A36/A6):
Product Name | Specification | Price ($/cwt) | Price ($/mt) | Price ($/nt) |
Angles | 2 x 2 x 1/4" | $45.30 cwt. | $999/mt | $906/nt |
Flat Bars | 3/16 x 2" | $50.50 cwt. | $1,113/mt | $1,020/nt |
1/2 x 4" | $45.50 cwt. | $1,003/mt | $910/nt | |
Square Bar | 1" | $47.25 cwt. | $1,042/mt | $945/nt |
Round Bar | 1" | $46.70 cwt. | $1,030/mt | $934/nt |
Channels | 3 x 3.5" | $47.25 cwt. | $1,042/mt | $945/nt |
Rising demand for agricultural equipment, specifically, not only helped major producer John Deere double its quarterly net income in Q4 2010 (sales rose 35 percent in the US and Canada and 22 percent overseas), but spurred the Wall Street Journal to highly recommend investing in equipment manufacturing companies in a recent report.
While healthy demand for merchant bar in the US is helping mills hold firm to asking prices, many distributors have competitively-priced imports stocked up and have been purchasing less domestic-sourced merchant bar in the last month than usual, enjoying greater profit margins in the process--current stock from Turkey arrived in the last month or so with tags at approximately $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt). However, distributors are not exactly clamoring for new import offers, which are still hovering in the range of $44.00-$46.00 cwt. ($970-$1,014/mt or $880-$920/nt) duty-paid FOB load truck at US Gulf ports.
Overall, imports are starting to dry up--according to license data from the US Import Monitoring and Analysis System (SIMA), the US only imported 6,485 mt of merchant bar in February, compared to 8,985 in January. Furthermore, with only two weeks left of March, data only shows 2,327 mt imported so far this month. Interestingly, Turkey is currently the top source of merchant bar for the month, when it usually is third after Canada and Mexico. The US has only imported 668 mt and 571 mt of merchant bar, respectively, from its NAFTA partners, when February levels were at 3,803 mt and 1,741 mt.
