US merchant bar market – Imports taking a turn for the better

The merchant bar import market is starting to look up as we enter the fourth quarter, with a trend that seems to be stabilizing. Since our last report, the import market has beenslowly recovering. A little over two weeks ago, when SteelOrbis last reported on merchant bars, import billet prices were softening and scrap prices were on a decline globally. Since then, Turkish and South East Asian billet prices have started to go up, and scrap prices have been creeping up slowly as well. With raw material prices increasing, we are seeing a strengthening in the market and a more stable pricing trend for merchant bars. Even though the import market seems to be making progress, US demand is still not as strong as it used to be in the second quarter, and combined with healthy inventories, US customers are not really looking to buy imports at this time. With import prices stabilizing, it is believed that if they were to increase, these higher prices would not be accepted in the market. However, in other parts of the world, if demand is strong enough, other major markets could accept a price increase, which could eventually lead to US acceptance. American service centers will start to make new purchases for January and February arrivals in the next couple of weeks. Even though the usual mills are asking for higher prices, it is still too early to tell if import prices will register a slight increase for year's end, however, instead of prices trending down, they seem to be neutral for now. Merchant bar offers from Turkey still range from $30.50 cwt. to $31.50 cwt. ($673 /mt to $695 /mt or $610 /nt to $630 /nt) FOB loaded-truck, US Gulf ports, as stated in our report two weeks ago. Taiwanese merchant bar offerings have not changed from our last report two weeks ago, remaining at a range of $29.50 cwt. to $30.50 cwt. ($650 /mt to $673 /mt or $610 /nt to $630 /nt) FOB loaded-truck, at Gulf and West Coast ports. The domestic market trend seems to be flattening out a bit with mills less busy and demand starting to slow down. Demand is dictating the pricing trend, keeping the trend neutral with prices expected to remain the same throughout October. In the fourth quarter we may see a price decrease for merchant bars, but as for now prices remain the same as from our last report. Prices are expected to stay flat for October. Current domestic transaction prices for merchant bars range from $30.90 cwt. to $38.45 cwt. ($681 /mt to $848 /mt or $618 /nt to $769 /nt), depending on size, shape, and thickness.