NEW YORK Rebar
mills have dug in their heels to counter a two-month slide in
prices, with volumes starting to improve from previously
lackluster levels and construction projects slowly moving off
Rebar prices retreated
in April and May from a February high of about $690 per ton
($34.50 per hundredweight) but appear to have struck bottom
this month at around $645 per ton ($32.25 per cwt), with prices
varying based on region and order size.
Margins at the mills
have been thin even as volumes have shown relative improvement,
so mills have held prices firm. Charlotte, N.C.-based Nucor
Corp. and Tampa, Fla.-based Gerdau Long Steel North America
both announced earlier this month they were holding prices flat
amm.com, June 6), and other mills have followed
everyones doing a good job at saying, Were
not going to drop our price," one mill source said.
Rebar fabricators have
seen orders and projects pick up, but their margins have been
thin as well.
"We kicked into high
gear in early March. Weve been working lots of overtime,"
a source at one Midwest rebar fabricator said. But business "is
still not great," he added. "Margins arent as good as
they could be."
Buyers have long been
hesitant about keeping stock on their floors, buying in small
quantities since the financial crisis struck the steel market
in 2009. Improving volumes have yet to lead to more buyer
confidence, sources said.
Rebar buyers expect
short lead times and buy in small quantities to fill orders.
"People are counting on a short lead time and being able to get
it from inventory. They want their material in a hurry," a
second mill source said. "Nobody wants to buy it in advance.
Nobody wants to take possession of it until they need it."
Without any major
legislation funding infrastructure development, rebar producers
are selling into smaller projects. Sources said a widely
expected increase in nonresidential construction (
amm.com, Feb. 5) has largely not yet arrived, with
contracts for restaurants, malls and stores not at
Billings Index (ABI), which reflects architecture firms
construction plans, dipped below 50 in April to 48.6,
indicating a contraction in construction spending, although the
index bounced back to 52.9 in May.
"The rebar market is
just ho-hum right now," the first mill source said. "Its
just not that impressive."