As SteelOrbis predicted, despite talks of a possible dip in prices, domestic merchant bar prices will remain flat for September shipments per Nucor Corporation.
Nucor has announced to customers, effective for September shipments, that its raw materials surcharge (RMS) will increase to $5.80 cwt. ($116 /nt or $128 /mt) from $5.25 cwt. ($105 /nt or $116 /mt) the previous month. The company made a corresponding downward adjustment to base prices, resulting in no net change in transaction prices for September.
For the remainder of August and throughout September, merchant bar prices will range 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.
Although prices managed to remain stable, steel professionals are skeptical about the market conditions for the future. Demand is sluggish, especially for smaller sizes due to the continually slowing housing market. Prices for larger sizes are steady at best, but demand has been on the decline. However, compared to the markets for other long products such as rebar and wire rod, the merchant bar market is really not so bad.
Shredded scrap prices went up slightly this month, and market sources say the next few months will show a similar trend, with prices increasing by approximately $10 /long ton to $20 /long ton. This raw material price increase may push merchant bar mills to increase their prices slightly to make up for the added cost, but then again, if the market doesn't show signs of improvement, an increase may not be accepted.
Not much is happening in the import market as prices are extremely close to domestic prices. Chinese offers are not gaining any takers as most buyers feel that it does not make sense to buy offshore when the price is the same and Chinese products are getting a bad reputation for having defects.
Billet prices are increasing in China; however, merchant bar mills have kept their offers more or less stable since our last report two weeks ago, with offers 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. A price increase almost certainly will not be accepted by US customers under these sluggish market conditions.
Turkish offers are also very high with little to no takers except for products they offer that other import or domestic sources do not produce.
Turkish offers have increased by $0.50 cwt. ($11 /mt or $10 /nt) since our last report two weeks ago following a billet price increase, and are now in the range of $36.00 cwt. to $37.00 cwt. ($794 /mt to $816 /mt or $720 /nt to $740 /nt) FOB loaded-truck, US Gulf ports. Turkish offers are trending slightly up because of the strengthening billet prices and freight rates.
Taiwanese billet prices are stable, keeping merchant bar prices flat. Prices are still in the range of $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.