CHICAGO The domestic reinforcing bar market is poised to hold steady heading into the new year as one producer said it plans to keep prices unchanged after a recent sideways move in scrap. But the picture could change in the coming months with an anticipated pickup in demand, sources said.
Charlotte, N.C.-based Nucor Corp. plans to lower its scrap surcharge on rebar, merchant bar and structural products by $1 per ton effective with Jan. 1 shipments following a slight dip in published scrap prices (amm.com, Dec. 10). But the steelmaker also said it would increase its base prices by the same amount, leaving tags unchanged, according to a letter to customers dated Monday.
Market sources generally expected other domestic mills to keep prices steady, although AMM hadnt yet seen letters from other mills.
However, any also said they expect tags to rise in the coming months as scrap supplies tighten over the winter and as demand picks up both abroad and domestically in early 2013.
"Some people were holding out for a decrease. Now theyre realizing there is no drop (in prices) and are grudgingly sending in their orders," one rebar distributor said.
Several buyers are looking to time their orders for the first week of January to avoid having stock at the end of the year, as well as to have material on hand in advance of any potential price hike announcements in mid-January, he said.
"I thought (prices) were going to move sideways," one East Coast rebar fabricator said in echoing other market sources, adding that he didnt expect the move to have any significant impact on the market.
A fabricator in the Midwest largely agreed. "Its a good thing theyre not raising them (prices)," he said.
Some market sources have become increasingly concerned about month-to-month swings in scrap prices despite a market characterized by generally weak demand (amm.com, Nov. 12).
The Midwest fabricator said his company has had a decent year but business has slowed, as it traditionally does over the holidays and during the winter months. Most orders are a fraction of what they had been earlier in the year, he said.
"Coming into winter, everyone is just buying what they need right now. ... So its quiet. And thats normal. But last year was a pretty mild winter, and we stayed busy, so it feels a little weird," the Midwest fabricator said.
A West Coast fabricator said business in the regions long-beleaguered construction sector is showing signs of picking up. Large projects, both public and privatesome of which could consume large quantities of structural steelare generally on the drawing board in the western states, and in California in particular, the West Coast fabricator said, adding that the projects range from bridge and rail work to residential high-rises and technology firm expansions.
"The domestic market is in better shape now than it has been in past years," he said. "There are some big-volume jobs out there that allow for optimism going forward."
Competition might also be less intense than in the past because some fabricators have either left the market or have been gobbled up by bigger companies, he said.