NEW YORK Early indications suggest domestic reinforcing bar prices could get a boost in March, sources say, a move that could be the first significant rattle in a market that has seen prices frozen all winter long.
Grade 60 No. 5 rebar prices have continued to hold unchanged through January and February at around $34 per hundredweight ($680 per ton) f.o.b. mill, but with many projecting an uptick in ferrous scrap prices in March, the steel market is widely expecting published rebar prices to strengthen in coming weeks, mill and service center sources said.
"We are about to raise our price," one mill source told AMM, attributing the planned price hike to forecast scrap strength as well as improved demand. "Were seeing product move at an increased rate over the last three weeks."
A rebar distributor agreed the pricing situation appears to be swinging toward the upside after months of stability.
"Theres strength in this puppy. It stuns me," the distributor said.
Multiple buyer sources said representatives at the major mills have indicated plans to raise published rebar prices, though the size of the expected price increases will largely depend on how much Chicago scrap prices move, sources said.
Most mills raw material surcharges for rebar are based on AMMs consumer buying price for shredded automotive scrap in Chicago. Its too early to say where scrap prices will settle in March, but some steel mill buyers and ferrous scrap suppliers have said they expect scrap prices to inch back up to January levels due to renewed supply tightness (amm.com, Feb. 19).
In February, scrap prices in the Chicago market settled down $9 for most grades. Mills did not ease published rebar prices, however, despite the decrease in scrap costs and a winter-related pullback in demand. Nucor Corp., for example, lowered its scrap surcharge for rebar by $9 per ton in February but raised its base price by the same amount, leaving net prices for rebar flat (amm.com, Feb. 15).
"The last week of January up until February has been real slow," a rebar fabricator in the Midwest said of recent demand. "That work is just not there, and even if it is, the margins are so cheap, its not worth it (to place large orders). Wed rather go broke with our feet on the desk than breaking our backs outside."
But business may be heating up as the weather thaws, and the mills appear to be banking on improved order books.
"Its been a wet winter. Aint a whole lot of work getting done," said the mill source. "(But) things in the rebar world are slightly sticking up. People are getting ready for the spring."
"There are varying degrees of optimism about the market. And its not just the seasonality of it," one market source added. "(Theres) not exuberance, definitely not that, but theres a big difference between everyone having some degree of optimism as opposed to some degree of pessimism."
Spokeswomen at Gerdau Long Steel North America and Commercial Metals Co. declined to comment, while a spokeswoman for Nucor did not immediately return calls for comment.