Domestic steel mills have held reinforcing bar prices flat for
most customers over the past several months in the face of
disappointing demand, with producers and fabricators in most
regions chasing too few orders with too many tons.
"Its a rough
market right now. The overall capacity for rebar producers is
about 60 percent. These are tough days," a mill source
A combination of wet
weather in many parts of the United States and an overall
sluggish economy has depressed shipment levels, with
construction contractors slowing down their work in the rain
and many fabricators left wondering when large-tonnage jobs
"A 700-ton job would
be a big job, and there are very few of them around. I can only
think of one that is going on (in my area)," said a source at a
rebar fabricator in Missouri. "The overall construction market
in St. Louis has come back a little, but not as fast as people
would like it to."
levels have been mediocre this summer, and demand so far this
year has improved only slightly over last year, market
participants said. Rebar consumption of 3.6 million tons in the
first six months of this year increased 2.3 percent from the
same period last year, according to data from the Steel
August has been mostly
slow so far. Independent fabricators said that the few
1,000-ton projects availablethe traditional bread and
butter of the rebar businessare mostly being won by
mills downstream fabrication segments.
prices for finished fabricated rebar have plummeted over the
past year, fabricators said. Demand has varied by region,
however, and certain markets have seen poorer margins than
"Its hit and
miss ... certain areas have been gangbusters," a rebar
distributor source said. Many areas with higher activity, like
the South and Southeast, have seen lower margins. "If I had to
live on my margins in Texas or (Nebraska), Id be
bitching, screaming and crying the blues. Id be lucky to
have a gumball to chew on," he said.
Although rebar mills
have kept their prices firm at around $645 per ton ($32.25 per
hundredweight), rebar buyers said that with such thin margins
on finished fabricated rebar, they were ready to pressure their
mill suppliers for a price break. Most said they had not seen a
decrease in mill selling prices, but there were rumors
circulating that indicated some softening.
"I know they lowered
some pricing to some guys in southern California. I dont
know if hes buying a lot or why," said a source at a
rebar fabricator in California. "One of the mills dropped him
50 cents (per cwt)."
"If you had 500 tons,
I think theyd work with you a little bit," a source at a
rebar fabricator in Ohio said. "They have been adamant up until
now, but I think they theyre starting to hurt."
Mill sources, however,
said margins also were too thin at the mill level to allow any
dealmaking. One mill source pointed to a steady decline in
selling prices over the past year, saying there was little room
for him to drop his prices.
"Price decreases since
July (2012) have lost us probably $90 to $100 per ton in
selling prices. Thats not one item: thats on
average. That just gutted it, and were seeing the effects
of that. Were concerned with that trend and were
trying to figure out a way to deal with it," a second mill