NEW YORK The rebar market
is showing signs of life as demand grows ahead of April
construction, with vendors reporting higher volumes, increased
activity and a bump in transaction prices of between $20 and
$25 per ton, depending on the buyer.
"(The market) is really good," a
source at a Midwest rebar distributor said. "Its very
strong right now."
A mill source agreed that demand
appeared to be on the rise. "Its been a busy month,
volume has been pretty good and it has been a little bit
better" than February, he said.
With order activity said to be
rebounding, most sources confirmed that the announced rebar
price hikes of $25 per ton ($1.25 per hundredweight) effective
with April 1 shipments were finding partialand sometimes
amm.com, March 13).
"The full increase hasnt
been implemented yet but Ive gotten basically $20 of $25
on it now," the rebar distributor source said.
In addition to an apparent
uptick in demand, higher March scrap prices also are lending
the announced rebar price increase some support, sources said.
AMMs consumer buying price for shredded
automotive scrap in Chicago rose $35 in early March (
, March 7), although early indications suggest that that
strength could abate in April.
"Rebar is a product that
doesnt have a lot of variable margins. Its very
closely tied to its raw material," said a source at a second
mill. Putting a portion of Marchs shredded automotive
scrap uptick into the sales price "is legitimate. Theres
good reason for the price to stick and not slide," he said.
Market participants reported
most transactions at around $690 per ton ($34.50 per cwt)
f.o.b. mill this past week, with some deals already including
the full $25-per-ton increase but other players still squeezing
in last-minute transactions at prices closer to the
$670-per-ton ($33.50-per-cwt) level.
Downstream demand likely will be
strong enough for mills to hold onto their new prices, sources
said this past week, citing traditional seasonal trends. Demand
for rebar has already picked up in states that have seen more
consistent warmer weather, but construction projects continue
to lag in regions that still see nighttime frosts, sources
"Thats kind of whats
holding it back for us the most," a source at a Midwest rebar
contractor said of the weather. "Once it hits the 40s and
mid-50s, itll take off."
Many buyers in warmer states
rushed to place orders before the $25-per-ton uptick took hold,
"They know what they buy today
will still be cheaper than what they buy next month, so
theyre hedging their bets," the rebar distributor source
said. "Youve got the cash; why not bring it in a few
weeks early and not have to worry about stock?"
But buyers in colder regions
were holding off until there are some more definite signs of
"Historically this would be an
extremely busy week at the mills because people would try to
pull forward as many orders as fast as they could to beat the
increase," a source at a northern service center said. "The
fact that its not busyIm leery that its
going to hold."