NEW YORK The
rebar market is still crawling out of the recession, and rebar
buyers and mills continue to express doubt about long-term
demand despite a recent uptick in shipments ahead of the winter
markets remain off-kilter and below pre-recession highs. While
buying has increased in recent weeks, the uptick appears to be
seasonal rather than cyclical.
... Everyone wants to get their stuff in before the snow flies
and people are trying to clean up projectsthey cant
wait around for a price decrease," one rebar fabricator in the
northern Midwest said. "Weve been pretty busy."
But domestic rebar
tags have been stagnant for months, with buyers paying around
$645 per ton ($32.25 per hundredweight) f.o.b. mill since June.
Aside from a few reported orders at lower prices, mills
havent shown significant signs of lowering prices despite
a slight shift down in shredded automotive scrap over the past
With scrap prices in
the Midwest settling up slightly this month (
amm.com, Oct. 10), gains in Mexican rebar tags and
limited buys of Turkish rebar, the mills might angle to lift
prices, sources said.
other ways to effectively increase pricing other than base
price; (the mills are) raising different freight surcharge
costs and rail costs, and theyre saying it costs more to
get to certain areas. Youre seeing different games being
played," a rebar buyer in the Midwest said.
Some rebar buyers said
a price increase could help get the market moving again.
"I see things very
flat, and Im hoping things will change. I know the mills
all want transaction prices to go up. Im not totally
against that. At the end of the day, its proven: over
time you usually make more money in a volatile market with
price structure going up," a rebar buyer in the Northeast
But there isnt
much optimism that the temporary order uptick reflects strong
cyclical improvement. Rebar consumption is still far below
pre-recession levels of around 10 million tons in 2006, and
consumption this year isnt expected to be much different
from 2012 levels of around 7 million tons.
Speaking at the U.S.
International Trade Commission (ITC) hearing Sept. 25 on rebar
imports from Turkey and Mexico, Jim Kerkvliet, vice president
of commercial sales at Gerdau Long Steel North America,
expressed uncertainty that U.S. rebar demand would ever return
to pre-recession levels.
forecast that nonresidential construction demand will not
return to pre-recession levels until 2019, and Im not
sure that rebar demand will ever recover to the prior level of
9 million tons," he said.
construction market nor the rebar market has recovered from the
beating we took in 2009," Nucor Corp. executive vice president
James Darsey said at the hearing. "Construction demand remains
well below 2006 levels and U.S. rebar production in 2012 was
almost 20 percent below 2007 levels. Although there have been
modest improvements over the past year or so, recovery remains
An East Coast rebar fabricator agreed. "The market in our
area has gotten a little better because of the volume of work,
but better than what? ... It was awful and now its better