NEW YORK Most buyers say
they expect to see no decrease in steel long product prices for
the third month in a row, despite a slight softening in ferrous
scrap prices in the key Chicago region.
"(The mills) will announce
sideways next weekyou can count on that," a source at a
Midwest reinforcing bar fabricator said.
Mills raw material
surcharges on long products often move in tandem with scrap
prices, particularly shredded automotive scrap in the Chicago
market, which settled down $9 to $377 per gross ton on Feb.
But buyers said the $9-per-ton
softening in scrap prices might not be dramatic enough to
precipitate a softening in steel mill selling prices as
"We dont yet know how the
mills will react (to scrap softening) but I suspect they will
resist lowering prices," a wire rod purchaser said.
A source at an Ohio Valley-based
rebar fabricator agreed that most buyers were not anticipating
a simultaneous steel price drop. "Any time (mill prices) can
(avoid being) moved down, I think they tend to do that," he
The expected stability in wire
rod and rebar prices despite a drop in scrap tags comes at a
time of increasing optimism about demand in the construction
Housing starts were at a
seasonally adjusted annual rate of 954,000 units in December,
up 12.1 percent from Novembers revised estimate and
nearly 37 percent above December 2011, according to U.S. Census
Bureau data, and industry leaders largely predict demand will
continue to improve in 2013 (
amm.com, Feb. 5).
"The thing is that demand is
picking up. I think it would be risky for the mills to decrease
their prices at this time. Were facing a little better
demand on the West Coast at this time," a source at a West
Coast service center told AMM. "If demand is starting
to pick up at the mills, it doesnt make sense to drop the
Grade 60 No. 5 rebar held steady
at around $34 per hundredweight ($680 per ton) f.o.b. mill in
January, while mesh-quality low-carbon rod traded at $33.50 per
cwt ($670 per ton).
Mills have not yet announced
their February price changes, but with scrap settling Feb. 7
most buyers expect mills to update published prices next