As demand for merchant bars in the US is still high, and producers are relatively full, the domestic
merchant bar market is still very strong.
However, the determining factor right now for a future price movement for domestic merchant bars is the
scrap market. The recent unexpected plunge in auto bundle prices may be an indication that a steep shredded
scrap price decrease is just around the corner, which will push the Raw Materials Surcharge (RMS) to a lower number. The current RMS, $5.80 cwt. ($128 /mt or $116 /nt), is added to the base price in order to calculate the net transaction price that steel buyers pay.
Nucor, leading
merchant bar producer in the US, favors stable pricing for their long products these days, which could mean they might keep their transaction prices the same for September. With their mills comfortably full, it is not unreasonable to expect them to raise their base prices in order to offset the decrease in RMS. As a result, the net price to customers should remain the same.
Domestic transaction prices for merchant bars have remained the same since our last report, ranging 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.
On the import side, the Turkish import pricing trend is now slightly down, as
Turkey is facing strong competition from Asian markets.
China and
Taiwan ship directly to West Coast ports, while
Turkey ships to Houston and other Gulf Coast ports, relying on rail transportation to further carry their steel loads to the West Coast. Rail transportation costs, which are a significant expense, have caused
Turkey to lose its competitiveness on the West Coast, leaving them with smaller than usual shipments to the Gulf. Stiff competition has lowered the demand for Turkish bars, so their former expectation of a price increase was not realized.
To the contrary, Turkish
merchant bar offers have softened by $0.50 cwt. ($11 /mt or $10 /nt) since our last report two weeks ago.
Billet prices have decreased in
Turkey as well, yet another factor in the downward pricing trend for merchant bars offered from that country.
Import Turkish offers now 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.
Asian
billet prices are softening as well, with Taiwanese
merchant bar offers ranging from $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, also a $0.50 cwt. decrease from our report two weeks ago.