NEW YORK Gerdau Long Steel North Americas leading
move to raise rebar prices may not result in higher transaction
prices but it could help keep them from falling further in the
wake of waning scrap tags, buyer and mill sources told
A Gerdau spokesman declined to comment on the motives behind
the hike, but market sources speculated the company's
announcement was largely intended as a pre-emptive move to put
a floor under rebar prices before lower scrap tags trickle
Rebars just too cheap (and) nobodys happy
with it, one rebar mill source said.
(Gerdaus) trying to shore up the numbers so they
dont go any further down.
Gerdau announced late April 5 that it was increasing its
transactional prices on rebar by $10 per ton (50 cents per
hundredweight) effective with new orders April 15 (
amm.com, April 5
). The move came just one day
after AMM lowered its consumer buying price for shredded
automotive scrap in the Chicago marketa major component
of some mills raw material surchargesby $22 per ton
amm.com, April 4
Rebar prices usually move in the same direction as scrap
prices, leading some to speculate Gerdaus move is an
attempt to stop last months largely successful price
increases from slipping alongside scrap (
amm.com, March 13
In late March, rebar prices rose to $690 per ton ($34.50 per
cwt) f.o.b. mill, up slightly from first-quarter lows of around
$670 per ton ($33.50 per cwt) but well below prices near $760
per ton ($38 per cwt) logged at this time last year.
From a standpoint of getting them back into something
that is somewhat profitable, they need to raise the price. ...
The momentum (in the market has) been downward. (Gerdaus)
throwing the increase out there if nothing more than to slow
the momentum down, a rebar fabricator said. You
have to slow the ship and get it moving in the other
Gerdaus move also surprised some market participants
because it came before an announcement from Nucor Corp., often
viewed as the price leader.
How out of character is that? a second rebar
fabricator said of the switch. Its bizarre.
Gerdau was scared as hell Nucor was going to lower the
transaction price based on scrap, added a rebar
distributor. I was happy when I saw (the letter). All
that meant to me was, thank God prices arent
Nucor Corp. will likely announce its price changes, if any,
sometime this week, sources said, with some predicting other
mills are likely to take a cue from Gerdau and hold on to their
current prices as well. Nucor could not be reached for comment.