Participants in the merchant bar market largely expect a
recently announced price increase of $20 per ton ($1 per
hundredweight) to hold, buoyed by rising scrap prices.
controlled their inventory levels ... and the mills know what
the inventory levels are. Scrap has some momentum to move up,
so (mills) have a relative level of confidence that they will
get (the increase) through," one distributor in the Midwest
said, adding that this would likely be true for both
large-volume buyers that typically get discounts off list
prices and smaller spot players that have to pay close to
"The mills are saying
that right now they have less (material) on the ground and
scrap is going up so, well, you need to pay the (higher)
prices," a distributor in the West said, adding that demand,
while not rocketing, has been decent. "October was a good month
for us. Its so far so good this quarter."
However, a second
distributor in the West cautioned that persistent deal making
in the merchant bar market made the effect of the increase on
transactional prices harder to predict.
"For a price sheet,
yeah, it has legs, but the price sheet means absolutely
nothing. Everybodys doing deals," he said.
surprised that the increase, launched by Tampa, Fla.-based
Gerdau Long Steel North America, was followed by market leader
Nucor Corp., Charlotte, N.C. (
amm.com, Nov. 6).
"Its a justified
increase. They have no reason not to follow (it)," the source
in the Midwest said.
"(Gerdau was) awfully
busy, thats why they took the lead," the first
distributor in the West said, adding that he was now looking at
increasing his foreign buys since domestic prices are poised to
Mexican mills are
still said to be dominating the import market due to slow
domestic activity there.
"They are selling at
extremely low prices and theyre going to everybody," one