NEW YORK Nucor Corp. has
announced for the second straight month its long steel prices
without waiting for scrap to settle, joining an apparent
industrywide shift away from the raw material surcharge
component previously used to help determine pricing.
Charlotte, N.C.-based Nucor said
June 5 it is keeping all of its published prices on reinforcing
bar, merchant bar and structural products unchanged. The
announcement, which followed Gerdau Long Steel North
Americas June 3 pricing announcement, came before
AMM settled its Chicago consumer buying price for
shredded automotive scrap, traditionally used as the basis for
Nucors raw material surcharge.
"This will serve to be our
pricing for the month regardless of any change in the raw
material surcharge, which will be announced no later than the
third Monday of the month," Nucor said in its letter to
"As always, we will monitor the
marketplace and will respond accordingly by making adjustments
to our pricing in order to assure you of a competitively priced
product," the steelmaker added.
This marks the second month in a
row major mills have announced their prices before the monthly
scrap trade closes, raising speculation that mills might be
looking to distance themselves from the surcharge tool (
amm.com, June 5).
Domestic mill sources said
players in the industry dont necessarily plan to
discontinue the raw material surcharge altogether, but they
confirmed they are moving away from using it as a determining
factor in their prices.
"We are interested in moving
toward a more fair and different system where the price is
based on geography and the market the products are entering,
not a globally traded commodity that is not freely traded," one
mill source said.
Criticism has been levied at the
raw material surcharge in recent months by both mills and steel
buyers, many of whom have complained that the raw material
surcharge obfuscates market forces.
"(The surcharge) doesnt
take advantage of local market conditions," said a source from
a second mill. "The business in different parts of the country
is so much different from others. In some areas, its
doing well; in others, were still in the winter."