NEW YORK The domestic merchant bar market was described as steady this past week, although some market participants said that, given the season, things should be busier.
"Its been medium-steady but not overwhelming. This time of year we should be very, very busy," a source at a Mid-Atlantic distributor said.
He attributed the slower-than-expected demand largely to an inability by customers to get bank financing for construction projects, which has meant that "nothings turning into orders."
A mill source agreed that the market was flat but said the assessment that things were weaker than forecast was not correct. "Things are behaving like they ought to at this time of year. Weve been fairly steady on the merchant bar side," he said.
Nonetheless, the mill source said he thinks prices could remain soft through August due to an expected decline in scrap prices (amm.com, May 24). "Normally, our low point for scrap is August and then it starts rising," he said.
This past week, prices for 2 x 2 x ¼-inch angles have held steady at $753 per ton ($37.65 per cwt), 3 x 3 x ¼-inch angles are unchanged at $762 per ton ($38.10 per cwt), 8- x 11.5-inch channels are at $747 per ton ($37.35 per cwt) and ½- x 4-inch flats are at $757 per ton ($37.85 per cwt).
The flat pricing comes as Nucor Corp. recently lowered its raw material surcharge on rebar, merchant bar and structural products by $22 per ton ($1.10 per cwt) but raised its base prices on those products by the same amount, leaving transaction prices unchanged (amm.com, May 21). Earlier in the month, the Charlotte, N.C.-based steelmaker had lowered its base prices by $20 per ton ($1 per cwt) "due to market conditions" (amm.com, May 3). Both moves were followed by other major domestic mills.
While most sources surveyed by AMM reported paying list prices for spot buys this past week, discounts were said to be emerging for large-volume buys.
"Oh absolutely they (the mills) come to me first with (the list price). The tonnage gets the deals," said a source at a second Mid-Atlantic distributor who buys small quantities.
The first Mid-Atlantic source said he had heard of big service centers getting discounts as deep as 12 percent off the list price for buys as small as 100 to 200 tons, although a source at a Midwest distributor said he had only seen the discounts available for big orders.
"Anythings possible, but thats not the norm. They (the mills) are looking for commitments for quarters or months (in order to give discounts of that magnitude)," he said.