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.
Charlotte, N.C.-based 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 jobs."
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 demand (amm.com, Oct. 11).