NEW YORK Rebar
demand is strong enough to support price increases announced by
major mills this week, according to producer and buyer sources,
as a seasonal uptick in orders and diminishing imports drive
rebar mills sales.
Nucor Corp. announced a price increase of $10 per ton (50 cents
per hundredweight) Oct. 14, with Tampa, Fla.-based Gerdau Long
Steel North America following suit the next day (
amm.com, Oct. 15).
For nearly five months
prior to the increase, the market saw unusually steady prices
at around $645 per ton ($32.25 per cwt) as mills shed their raw
materials surcharge and held most prices level. Margins
remained low despite overall softening in scrap prices, mills
said, and the increase was a long time coming.
"Rebar is too cheap,
and I think this is a move in the right direction," one mill
source said. "Our last months shipments were pretty good,
and up quite a bit from the previous month. I believe
theres enough business to warrant the increase."
The mills have seen an
increase in purchases recently as rebar buyers rush to supply
contractors who want to finish their projects before snow hits
the ground, sources said. Rebar buyers and mills are likely to
see strong activity in the next few weeks.
"Right now were
pretty busy. Were low on a lot of sizes because we were
projecting lower sales. We have a lot of holes in our
inventory. Im out of No. 5s and No. 4s," a California
rebar buyer said. "Our customers are nervous about getting
material. By the end of the year we get rain, which delays
Mexican import offers
have risen about $20 per ton and Turkish imports to the United
States have slowed following the Sept. 4 filing of a trade
petition against Turkish and Mexican imports, buyers told
AMM, leaving more room for domestic producers to take
advantage of any demand increase.
"Everyone is in
agreement: the fact is that (pricing has) been down too far and
it has to come back up," a rebar buyer in the Midwest said.
"Prices have been depressed way too long. Scrap is still
increasing right now heading into winter, and I think $10 per
ton is actually kind of low."
The recent uptick in
demand is likely more seasonal than cyclical, however, and
rebar mill executives arent optimistic about long-term
amm.com, Oct. 11).