NEW YORK Early
indications suggest domestic reinforcing bar prices could get a
boost in March, sources say, a move that could be the first
significant rattle in a market that has seen prices frozen all
Grade 60 No. 5 rebar prices have
continued to hold unchanged through January and February at
around $34 per hundredweight ($680 per ton) f.o.b. mill, but
with many projecting an uptick in ferrous scrap prices in
March, the steel market is widely expecting published rebar
prices to strengthen in coming weeks, mill and service center
"We are about to raise our
price," one mill source told AMM, attributing the
planned price hike to forecast scrap strength as well as
improved demand. "Were seeing product move at an
increased rate over the last three weeks."
A rebar distributor agreed the
pricing situation appears to be swinging toward the upside
after months of stability.
"Theres strength in this
puppy. It stuns me," the distributor said.
Multiple buyer sources said
representatives at the major mills have indicated plans to
raise published rebar prices, though the size of the expected
price increases will largely depend on how much Chicago scrap
prices move, sources said.
Most mills raw material
surcharges for rebar are based on AMMs consumer
buying price for shredded automotive scrap in Chicago.
Its too early to say where scrap prices will settle in
March, but some steel mill buyers and ferrous scrap suppliers
have said they expect scrap prices to inch back up to January
levels due to renewed supply tightness (
amm.com, Feb. 19).
In February, scrap prices in the
Chicago market settled down $9 for most grades. Mills did not
ease published rebar prices, however, despite the decrease in
scrap costs and a winter-related pullback in demand. Nucor
Corp., for example, lowered its scrap surcharge for rebar by $9
per ton in February but raised its base price by the same
amount, leaving net prices for rebar flat (
amm.com, Feb. 15).
"The last week of January up
until February has been real slow," a rebar fabricator in the
Midwest said of recent demand. "That work is just not there,
and even if it is, the margins are so cheap, its not
worth it (to place large orders). Wed rather go broke
with our feet on the desk than breaking our backs outside."
But business may be heating up
as the weather thaws, and the mills appear to be banking on
improved order books.
"Its been a wet winter.
Aint a whole lot of work getting done," said the mill
source. "(But) things in the rebar world are slightly sticking
up. People are getting ready for the spring."
"There are varying degrees of
optimism about the market. And its not just the
seasonality of it," one market source added. "(Theres)
not exuberance, definitely not that, but theres a big
difference between everyone having some degree of optimism as
opposed to some degree of pessimism."
Spokeswomen at Gerdau Long Steel
North America and Commercial Metals Co. declined to comment,
while a spokeswoman for Nucor did not immediately return calls