As the New Year approached, the
US merchant bar market was looking up, with demand holding steady, import bookings taking place, and prices heading in an upward direction.
Buying activity was a bit sluggish during the second half of December due to the normal holiday season slowdown. However, overall for the month of December, import buying activity picked up significantly from the autumn months. Buyers have been taking advantage of lower import prices, placing orders for March and April arrivals.
However, with Asian
billet prices increasing, and decent demand for merchant bars in the
US, it is expected that import
merchant bar prices will most likely go up before they go down again. Import
merchant bar mills in all regions are starting to raise prices again, with offering prices creeping up in all regions. This will most likely result in higher priced imports in the
US. Therefore, the pricing trend for import merchant bars is now slightly up, and a price increase is expected to occur in the near future..
For now, current offerings of small sizes from
Turkey still range from $32.00 cwt. to $33.00 cwt. ($705 /mt to $727 /mt or $640 /nt to $660 /nt) FOB loaded-truck,
US Gulf ports.
Also covering a smaller size range, Taiwanese
merchant bar offers have also remained the same since our last report, still in the range of $30.00 cwt. to $31.00 cwt. ($661 /mt to $683 /mt or $600 /nt to $620 /nt) FOB loaded-truck, at Gulf and West Coast ports, but are more dominant on the West Coast.
Larger and structural sizes primarily come from
Brazil. However,
China has also been reportedly shipping large quantities of merchant bars to the
US recently. These shipments should show up in the Gulf and West Coast region in March and April.
License data from the United States import administration shows that the top five
merchant bar exporters to the
US for the months of November and December 2006 were as follows:
Canada at 9,781 mt;
Brazil at 9,278 mt;
Mexico at 5,488 mt;
Japan at 4,102 mt, and
China at 3,367 mt. The data is for light sections of carbon and alloy steel, U, I, L, T and H shapes of 3” or smaller (does not include rounds, squares, or
flats).
On the domestic side, the
scrap market has bottomed out and is now pushing its way back up. With
scrap prices rising, it is only a matter of time before
Nucor raises
merchant bar prices again. Domestic mills are busy and can afford to boost prices up in Q1, following the trend of shredded
scrap prices. For the month of January, prices will remain at December levels, but will most likely go up after the first month of 2007.
Domestic
merchant bar prices range from $29.60 cwt. (e.g. 2 x 2 x ¼ angles) to $37.70 cwt. ($681 /mt to $848 /mt or $618 /nt to $769 /nt), depending on size, shape, and thickness. Even though this is a wide range, most domestic
merchant bar prices tend towards the lower end of the spectrum.
Overall, the
merchant bar market is picking up. The non-residential
construction market is dictating demand, keeping it decent. Mills are still busy and buying activity has been increasing.