CHICAGO Announced price
hikes for concrete reinforcing bar and merchant angles,
channels and flats have largely stuck as mills have held the
line on tags, even as political uncertainty in the United
States leaves some buyers jittery.
While some brushed off concerns
about the budget showdown in Washington as overblown, they
nonetheless conceded that the political drama had stoked
concerns that could see projects delayed and buyers more
reluctant to place orders.
"People have to plan for the
worst-case scenario. Its just human nature," one
structural steel buyer said.
A construction industry source
agreed that the fiscal cliff theatrics were slowing business.
"Someone needs to take a few Republicans, a few Democrats, get
a few beers and settle this thing so the rest of us can get on
with business," he said.
But as the political gridlock in
Washington continues, some market players describe business as
brisk, especially in Texas, thanks to a healthy state economy,
and the Dakotas, where the Bakken shale has driven demand for
everything from housing to service industries. The health-care
sector also was described as strong, with sources saying some
hospitals were looking to push through expansions or new
building projects in advance of anticipated new federal
But others said that business
had remained unchanged in recent months or even dropped off
over the fall. They suggested that a 2013 on par with this year
might be as good as could be expected, given a U.S. economy
that may be treading water at best or even slowing.
On the raw materials front, most
sources welcomed an anticipated sideways move in scrap prices
amm.com, Dec. 4) in a year that has been marked by
month-to-month price volatility. "For 20 years, (prices)
wouldnt move more than $30 over 12 months. You could
almost hang your hat on it. Then you go back to 2008, and it
moved $410 in six months. How do you make a plan with that
going on?" another rebar fabricator said, echoing the sentiment
of rebar consumers.
Still, one mill source said that
his company had little choice but to boost prices in November,
given higher scrap costs. "(The increase) is holding. It even
drove a little demand. People got off the fence and ordered
some tons to get ahead of it," he said.
Most domestic mills announced
price increases of $35 per ton ($1.75 per hundredweight) for
rebar, merchant bar and structural products in mid-November (
amm.com, Nov. 12), effective early December in
most cases, lifting AMMs price for Grade 6, No.
5 rebar to $680 per ton ($34 per cwt), although sources put
tags at between $660 and $700 per ton ($33 to $35 per cwt),
depending in part on factors such as order size.
While some market players argued
that the increases were not holding entirely, even at the mill
level, most agreed that mills have been disciplined about the
latest round of increases. Discounting is largely coming from
distributors who bought before the increase went into effect
and who can therefore raise prices less than the mill-announced
increase and still make a profit.
Some market players predicted
that rebar tags would remain unchanged in the near term, given
unusually warm weather in some parts of the country, which
increases scrap flow. But they also speculated that prices
could rise going into the first quarter as the outlook becomes
clearer and colder weather kicks in.