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Nucor holds line on February rebar prices

Keywords: Tags  Nucor, reinforcing bar, merchant bar, structrual products, price announcement, construction, imports, Turkey steel


CHICAGO — Nucor Corp. plans to hold the line on transaction prices for concrete reinforcing bars, merchant bars and structural products for a second consecutive month, a move that will likely be followed by other mills, market sources said.

The Charlotte, N.C.-based steelmaker said in a letter to customers Thursday that its raw material surcharge would stay the same in February. As a result, "the net effect is that our transaction pricing ... will remain unchanged," the company said.

The steelmaker had lowered its January scrap surcharge by $1 per ton while increasing its base prices by the same amount, resulting in no net change to transaction prices this month vs. December (amm.com, Dec. 11).

AMM had not seen February pricing letters from other mills as of Friday afternoon, but not all domestic mills make written announcements when prices remain steady.

Following Nucor’s leading move, buyer sources generally said they expect prices across the market to remain unchanged next month, given a sideways scrap market and slower wintertime demand. As such, AMM’s Grade 60, No. 5 rebar price has also held unchanged at $680 per ton ($34 per hundredweight) f.o.b. mill.

"January is historically our slowest sales month, and it is following that trend," one Midwest fabricator said of the flat pricing. "But I have fabrication orders. We’ve got stuff going to West Virginia, Pennsylvania and New Jersey, and we’re expecting growth of 20 percent this year."

Most sources agreed that demand, while slow in most areas, will pick up in 2013, especially given that distractions about the "fiscal cliff" are no longer weighing on the market, at least for the time being. But others said it was too early to make any overly optimistic predictions until February or March, when it should become clearer whether the construction market—the major end-use sector for rebar—is indeed recovering and, if so, at what pace.

Some buyers said they had expected U.S. rebar mills to drop tags slightly, with some citing an anticipated influx of rebar, mostly from Turkey, to ports in Houston and New Orleans in coming weeks.

"(Overseas rebar suppliers) are looking to bring material into the U.S. because the European market is terrible, and they’ve got to keep their mills going," one procurement manager said.

U.S. rebar imports stood at 47,140 tonnes in December, according to license data from the U.S. Commerce Department’s Import Administration division. The country is on course to import at least 70,189 tonnes of rebar in January, according to license data calculated through Jan. 11. Turkey has been the top overseas supplier of rebar to the U.S. market during the past year, and by a big margin.

Some sources said they expect as much as 200,000 tons of rebar to arrive in January and February, while others said those estimates are overblown.

"It’s not a surprise that scrap went sideways. It is a surprise that the mills didn’t drop (the price) a little bit with it being winter and (construction activity being) weak," one distributor said. "I thought (domestic mills) might send a warning sign (to importers) and knock (prices) down."

But one upshot of the flat pricing is that buyers who had been expecting a drop have been more likely to place orders, the distributor said. "I’m busy and doing well, surprisingly," he said. "Things are getting better. It’s not like they were five years ago. But I’m getting my fair share."


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