December Scrap / Rebar Updated
Scrap numbers were posted this week for December. No change from November was observed in shredded scrap for the Chicago index. Most other regional markets showed the same trend while a few reported slight increases from November to the tune of $5-$10/ton. This is not surprising as collections of scrap become difficult in the winter months causing a reduced supply. More importantly this shows a short-term bottom in a market that had been falling for the last 90 days. Most predict that domestic scrap will rebound in the coming months only slightly. Likewise on the global front, scrap has seemed to have found a bottom in other markets as well with Turkey reporting increased purchase prices on their scrap in the first 2 weeks of December.
The rebar market is seeing seasonal slow-downs in most areas of the country. With the holiday’s quickly approaching, existing projects are finishing up while new ones seem to be being held until the new year. Rebar Users report strong sales for 2014 and solid back-logs for the coming year. Domestic mills continue to cling to current pricing riding those strong back-log predictions for the coming year in the face of growing downward pressure on price. The substantial reduction in their raw material costs coupled with a soft global rebar and commodity market are causing buyers to really question their flat pricing over the 4th quarter. As long as mills can remain full – expect the relatively bullish position on pricing to remain.
On the import side, numbers seem to have leveled off in the recent weeks with a few Turkish producers actually announcing increases for this week in the export offers. Turkey is reporting increased raw material costs and as such are trying to raise prices for both export and local markets. Even such, buyers remain leery this week heading into the holiday hoping to defer any major purchasing decisions until after the holiday season.