NEW YORK Nucor Corp. has lowered its net price for concrete reinforcing bar (rebar) by $15 per ton, leading Gerdau Long Steel North America to retract its earlier price hike and fall in line with Nucors move.
Charlotte, N.C.-based Nucor said in an April 10 letter to customers that it was increasing its base price for rebar by $7 per ton (35 cents per hundredweight) but reducing its scrap surcharge by $22 per ton ($1.10 per cwt) effective with April 11 shipments, resulting in a $15-per-ton (75-cents-per-cwt) decrease in transaction prices. AMMs Chicago consumer buying price for shredded automotive scrapused as the basis for Nucors raw materials surchargefell $22 per ton last week (amm.com, April 4).
The $15-per-ton decrease essentially changes the steelmakers announced April 1 increase of $25 per ton to a more modest $10-per-ton increase, Nucor said in the letter. A Nucor spokesman confirmed that the company had revised its pricing but declined to comment further.
Nucors move comes just days after competitor Gerdau Long Steel North America said it would increase rebar transactional prices by $10 per ton (50 cents per cwt) effective with new orders April 15 (amm.com, April 5). At the time, sources speculated that Gerdau appeared to be seeking to put a floor under prices in the wake of falling scrap tags, rather than pushing for a true transaction price increase (amm.com, April 9).
However, as a result of Nucors move, Tampa, Fla.-based Gerdau has since opted to retract that increase.
"We are disappointed with recent price change announcements in the marketplace, which we dont believe align with current market conditions. However, in order to maintain our competitive position in the market, Gerdau Long Steel North America is rescinding the price letter dated April 5 announcing a 50-(cent-per-cwt) increase effective April 15, 2013," Marcelo Canosa, Gerdaus commercial director for rebar and wire rod, wrote in a letter from the company dated April 11.
"Also, effective immediately, Gerdau Long Steel North America is decreasing the transactional price of reinforcing bar products by 75-(cent-per-cwt)," the company added.
Gerdaus decision to change its stance didnt come as a surprise to players in the steel long products market, who had told AMM earlier in the day that they were waiting for a possible follow-up announcement from Gerdau, as Nucor is traditionally considered the pricing leader for rebar.
"Ill go out on a limb and predict a backpedal," a rebar fabricator said earlier Thursday.
"Weve got falling scrap prices and that puts everyone on the defensive," a mill source added of the falling prices. "If (buyers have) work, theyre taking material. If they dont have work, theyre not interested in putting it in inventory."