US domestic merchant bar prices are up $65 /nt for August shipments; however, another price increase in the near-term is now unlikely, and September may bring some long-due price stability to the bar market.
The steel industry is anxious to see where shredded scrap prices will land in August, and buyers are already speculating what merchant bar prices will do, come September. It has been an upward ride for merchant bar products this year, but it is speculated that autumn may bring the price stability that buyers have been hoping for.
Though raw material surcharges for September have yet to be announced, scrap brokers are telling SteelOrbis to expect a slight downturn in price and, at best, no change at all. It looks as if shredded scrap prices have finished their upward trend for the time being and are likely to head down by $20 to $30 /long ton in August. Despite a possible decrease in shredded scrap prices, no downward movement for merchant bar prices is expected due to the tight market dynamics.
Merchant bar products, especially larger sizes used in commercial construction, are still seeing decent US demand. But more importantly, imports are nonexistent, giving a large advantage to domestic mills to set their price. It has been quite some time since the US has seen attractive import offers, so most US buyers have been sticking strictly to domestics. Some small quantities from Mexico still cross the border from time to time, but not enough to make a big impact.
For August, Nucor's raw materials surcharge (RMS) is $443 /nt ($22.15 cwt. or $488 /mt), which is an increase of $65 /nt ($3.25 cwt. or $72 /mt) from the company's July RMS. Domestic merchant bar prices are now ranging from $53.70 cwt. to $61.40 cwt. ($1,184 /mt to $1,354 /mt or $1,074 /nt to $1,228 /nt) depending on size, shape, and thickness.
So far this year, merchant bar producers have pushed through $397 /nt in price increases to customers. The increases have been as follows: $25 /nt for January shipments, $60 /nt for February, $0 for March, $25 for April, $147 /nt for May, $40 /nt for June, $35 /nt for July, and, finally, $65 /nt for August.