NEW YORK Reinforcing bar demand remains spotty nationwide, with some regions seeing a flurry of activity and others reportedly thirsty for work.
"There are pockets of activity but there are pockets of desperation," one rebar fabricator in Ohio said.
U.S. demand for rebar has been erratic and highly variable based on region, with areas of the Northeast and the Mid-Atlantic fighting for orders, and Texas and some West Coast states riding a wave of activity, according to both buyer and seller sources.
Sources reported poor order backlogs in states like Maine, Pennsylvania and Ohio, and higher levels of activity in the Dakotas, Nebraska, Texas and California.
One source attributed some activity to construction associated with natural gas exploration, which has led to increased building projects that require rebar in areas with natural gas drilling.
"I had to send out four loads because of the oil pocket down in Texas. Theyre putting up apartment buildings (to house the energy workers). ... There are pockets of really good stuff," a rebar distributor said. "Certain pockets are just like gangbusters. It just depends."
However, that selective strength hasnt been enough to keep a floor under rebar prices, which have fallen $20 per ton ($1 per hundredweight) after major mills announced cuts at the start of the month, led by Gerdau Steel Long America (amm.com, May 1). The price drop came several days before AMM settled its consumer buying price for shredded automotive scrap, the basis for some mills raw material surchargesan unusual move that some sources said appeared to be an attempt on the part of the mills to change prices independently of scrap tags (amm.com, May 3).
Buyers said they have taken advantage of the full $20-per-ton drop, with sources pegging rebar transaction prices at around $650 per ton ($32.50 per hundredweight) f.o.b. mill this past week, down from $670 per ton ($33.50 per cwt) two weeks ago.
"The $20 (cut) kicked in and its sticking for sure," a West Coast rebar fabricator said. "The mills all kind of said they dont want prices to go much below this."
But while some buyers said they bought at the lower numbers, with uncertainty about scrap volatility and continued patchy demand, most buyers are hesitant to hold any inventory and have generally been buying no more than they need.
"Theyre all sitting on the fence," a mill source said of his customers. "If they need material, theyre buying. I think everybodys just kind of waiting and seeing."