Domestic merchant bar prices in the US are stable for March, but there is some speculation that prices may be up for April.
The shredded scrap market is usually a good indicator of where long products pricing will head; however, there are other contributing factors as well. To start, earlier this month there was market chatter that scrap prices were trending downward for March, but recently, scrap brokers have told SteelOrbis that the trend is turning around and that shredded scrap prices may be headed up slightly for March. If scrap prices do trend upward again, it will most likely be only a slight adjustment in the area of $10 /long ton.
In addition, compared with international merchant bar prices, domestic prices are low and have room to move up. Offshore prices are higher than the US domestic prices for merchant bar products, and offshore prices are not trending downwards any time soon. Along the same lines, import prices are high, making import competition in the US minimal. Buyers are not seeing any attractive import offers at this time, which is pushing service centers to stock mostly domestic material. Even if offshore prices are slightly lower, the benefits do not outweigh the risks, say most service centers. For offerings on the table today, deliveries are pushed out until May. Buyers are not taking the risk, because by that time domestic numbers could possibly peak and perhaps go down.
Domestic mills have the ball in their court and could easily bump prices up for April, especially if scrap prices stay put or rise in the next few days.
For the month of March, domestic merchant bar prices are ranging from $38.10 cwt. to $45.80 cwt. ($840 /mt to $1,010 /mt or $762 /nt to $916 /nt), depending on size, shape and thickness. The domestic pricing trend is slightly up as it is a possibility that mills are upping prices for April.
For the most part, buyers stated that they are being very cautious and only buying what is needed since demand is just mediocre, prices are high and the market could turn around very quickly.
On the import side, there are very few import sources remaining. Offers from all regions are high and little is trickling in.
Offering prices from Turkey to the Gulf are up significantly since our last report. Turkish offers now ranging from $45.00 cwt. to $46.00 cwt. ($992 /mt to $1,014 /mt or $900 /nt to $920 /nt) FOB loaded-truck, US Gulf ports, with little to no takers. Other regular import sources such as Taiwan and China are pretty quiet. Peru made an appearance in the US Gulf, but new tons are hard to get. With other markets hotter than that of the US, future import deals look pretty implausible unless traders commit to high prices months ahead of selling the products. Even so, with potentially hundreds of sizes to specify, position taking is not a easy task, even for the most seasoned trading house.
License data from the US Import Administration show that worldwide light bar exports to the US as of February 26, 2008 totaled only 7,316 mt with the top three exporters to the US being Canada with 5,373 mt, Mexico with 1,304 mt, and Taiwan with 274 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).