NEW YORK Nucor Corp. has
announced a net price increase of $25 per ton ($1.25 per
hundredweight) on concrete reinforcing bar (rebar) following an
uptick in scrap prices last week.
The Charlotte, N.C.-based
steelmaker raised its raw materials surcharge on rebar,
merchant bar and structural products by $35 per ton ($1.75 per
cwt) but lowered its base prices by $10 per ton (50 cents per
cwt), resulting in the $25-per-ton net increase in transaction
prices effective with April 1 shipments, the steelmaker said in
a March 12 letter to customers. Nucors surcharge is based
on AMMs consumer buying price for shredded
automotive scrap in Chicago, which rose $35 this month (
amm.com, March 7).
Gerdau Long Steel North America
followed the leading move, announcing in a letter to customers
its own net $25-per-ton rebar price increase, and other mills
were widely expected to follow suit.
It is the first published
increase in net prices since November, when steelmakers
announced price hikes effective with Dec. 1 shipments (
amm.com, Nov. 12).
Sources in the rebar market said
they were confident the price hike would stick ahead of an
expected spring thaw in construction.
"If spring ever arrives,
business will be a little better," a steel mill source said. "I
think honestly that the price increase will fly."
A source at a rebar fabricator
agreed, noting that he was starting to see an uptick in orders.
"Business is not so bad. It looks like spring might be coming
finally. Commodities have been beat to hell so bad. Im
glad things are coming back," he said.
"Prices (are) going in the
proper direction," a second mill source said.
With demand reportedly on the
rise, some market participants questioned the decision to boost
published prices by just $25 per ton instead of the full $35
increase in scrap prices, saying steelmakers may have missed a
chance to improve margins in a market that may have accepted
the full bump.
"I think that $35 (per ton)
would have flown," the first mill source said, conceding
nonetheless that while demand appears to be on the rise,
its not yet back to full speed. "Margins continue to
compress ... (and) business continues to be rather spotty. We
have not yet seen the anticipated pickup in business that
everyone was hoping for."
"It sends a terrible message to
the market," a second rebar fabricator source said of the
$25rather than $35boost. "Most of the mills are
bleeding (and) theyre saying they need to get back to
more profitable times. But theyll take a portion of their
profit and give it back to us?"
A bearish source at a rebar
supplier said he didnt think that demand was strong
enough to support even a $25-per-ton increase. "I dont
think the strength is there," he said. "(The mills) are banking
on the fact that as soon as the weather breaks theyll get
their increase, but it depends on how much" business there is
in the construction market.