NEW YORK A sideways scrap
market and continued lethargy in the construction sector have
kept prices for steel long products largely flat this month,
sources said, noting that the approaching debt ceiling in
February is also serving to keep some would-be buyers out of
"It looks like January will be
an average month and there seems to be a lot of indecision,"
one rod buyer said. "No one is making any long-term
commitments, and were looking at the late-February debt
ceiling as the big problem that a lot of people have. Until
this gets resolved, many small businessmen are not doing
Both wire rod and reinforcing
bar (rebar) demand has been sluggish in the first few weeks of
the new year, market players said. As a result, prices are
steady with mesh-quality low-carbon wire rod prices at around
$33.50 per hundredweight ($670 per ton) f.o.b. mill,
industrial-quality low-carbon rod at $34 per cwt ($680 per ton)
f.o.b. mill and rebar at $34 per cwt ($680 per ton) f.o.b.
"We have not seen activity," one
rebar buyer said. "People are betting on things slowing down,
so theres no incentive to buy anything now."
Also contributing to the flat
long products pricing is a lack of volatility in the ferrous
scrap market, which settled sideways in January for the second
consecutive month (
amm.com, Jan. 10).
But while wire rod and rebar
demand remains slow as buyers wait until the weather thaws
before making bigger purchases, a possible spring pickup in
building rates could jolt some life back into the lackluster
sector, sources said.
"People are on the balls of
their feet wondering whats going to happen," according to
a second rebar buyer. "(The year) is starting off a little
Specialty wire rod fabricators
who supply the automotive industry have a rosier outlook on the
market, saying that the auto industrys relative strength
compared with the construction market made it a more attractive
target. Several auto companies, including General Motors Co.,
Detroit, and Toyota Motor Sales USA Inc., Torrance, Calif.,
have outlined plans to boost U.S. capacity this year (
amm.com, Jan. 17).
"(The auto industry) was the
first in (to the recession) and the first out," a second rod
buyer said. "Business is OK because, fortunately, were
But outside of the auto market,
both wire and rebar buyers predicted the sluggishness would
continue, with modest and sporadic orders dominating the market
until scrap moves or construction picks up again.
"When I look at the mills and I
look at their lead times being so short, I promise you every
steel mill is struggling with their order book," the second
wire rod buyer said.