NEW YORK — At least two domestic mills have dropped net transaction prices for steel bar products by $30 per ton—double the $15-per-ton reduction previously announced by Gerdau Long Steel North America.
Nucor Steel Auburn Inc., a division of Charlotte, N.C.-based Nucor Corp., announced in a letter to customers Friday that it was cutting transaction prices by $30 per ton for concrete reinforcing bar (rebar), merchant bar and structural products.
"As always, we will monitor the marketplace and will respond accordingly by making adjustments to our base pricing in order to assure you of a competitively priced product," the Nucor letter read.
The reduction in the mill’s net transaction prices is the result of a $58-per-ton drop in its raw materials surcharge paired with a $28-per-ton increase in its base prices, the letter from the Auburn division said.
Fort Wayne, Ind.-based Steel Dynamics Inc.’s Roanoke Bar division also sent a letter to customers Friday announcing a $30-a-ton drop on all products, effective immediately.
"Steel Dynamics Roanoke Bar division reserves the right to be competitive in the marketplace where necessary," the letter read. A source at the company told AMM that falling scrap prices were the primary driver behind the decline.
Nucor and SDI did not return calls for comment, but AMM understands other Nucor and SDI mills likely followed suit.
On Thursday, AMM lowered its Chicago shredded automotive scrap price—used as the basis for many mills’ surcharges—by $58 per ton after earlier indications had suggested the drop-off wouldn’t be so sharp (AMM, June 8).
In a leading move Wednesday, Tampa-based Gerdau cut its tags by just $15 per ton (AMM, June 7). A Gerdau spokesman declined to comment Friday when asked whether the company might move to match its competitors’ $30-per-ton drop.
"The reason behind the decrease is simple: Everyone knew scrap was falling some $45 to $50 (per ton). Gerdau sent out (the first) decrease to temper the excitement and hoped that the market (wouldn’t) fall further," one rebar distributor said.
In addition to falling scrap prices, the U.S. construction sector’s summer slowdown also may be behind the falling rebar prices, sources said. Others said uncertainty in markets such as China and the European Union also was to blame, since weakness overseas can lead to increased imports.
At least two large foreign shipments of rebar are set to hit U.S. shores this summer, traders said, noting that rebar imports are then expected to fall off come September.