NEW YORK Five years after
the recession pounded the steel industry, domestic concrete
reinforcing bar demand is steadily improving as construction
recovers, but the rebar market continues to battle narrow
profit margins and capacity underutilization, Concrete
Reinforcing Steel Institute (CRSI) president and chief
executive officer Bob Risser told AMM.
"Things are loosening up a
little in the bidding. Were kind of out of the woods and
the independent fabricators are going to survive this," Risser
said. "(But) Im almost universally hearing from people
across the board, both big and small, the margins have not come
along with that at all."
Rebar use increased 13 percent
in 2012 from a year earlier according to a report CRSI is set
to release at the end of April, and is expected to increase at
least 7 percent in 2013, Risser said. But that hasnt
meant the books are significantly better.
"The prices need to go up," said
one mill source, who reported higher volumes month over month
but slim profits. "Rebars just too cheap. I dont
think anyones making any money."
"Business is picking up a little
bit," a rebar service center source on the West Coast said.
"But margins are not so good or so attractive. Were
selling. And while its not what the company wants (to
sell at), were still selling."
Apparent rebar consumption
totaled 7.2 million tons last year, up from a low of less than
6 million tons in 2009, according to CRSIs report. At the
peak of the pre-recession construction boom in 2006, however,
rebar use reached more than 10 million tons.
"Our fabrication capacity is far
ahead of current demand, even with the (consumption) increases
that weve seen," Risser said.
In its most recent earnings
report, Commercial Metals Co.s Americas Fabrication
segment reported a 6.3-percent increase in rebar shipments in
its fiscal second quarter compared with the same period a year
earlier, but the unit still posted an adjusted operating loss
of $3.8 million.
Risser said there are bright
spots in 2013, however, as construction activity in the
Northeast, Florida and California becomes more robust and rebar
"Were very optimistic
about the future because of the pent-up demand and all the cash
sitting in the corporate coffers," he said. "Were seeing
condos in Florida again; were seeing that type of
residential and commercial construction starting to come