In mid-March, Nucor announced to customers that its merchant bar prices will rise $25 /nt ($1.25 cwt. or $27.56 /mt) for April shipments. Expectations are that May prices will increase strongly as well.
If there is no price increase announcement in April for immediate effect, domestic merchant bar prices for the month of April will range from $39.35 cwt. to $47.05 cwt. ($868 /mt to $1,037 /mt or $787 /nt to $941 /nt), depending on size, shape and thickness.
The big story in the longs markets is that shredded scrap prices are trending up for April. Scrap brokers have commented that they are expecting a decent-sized jump for April prices, possibly in the $50 /long ton range or more. If scrap prices take a large leap, domestic merchant bar mills will be sure to boost their prices to make up for the raw material costs. The international price levels are so high now that very little imported material is making its way to the US. With import competition no longer a factor, domestic mills have a stronger stance if they do raise prices a large amount.
Even if offshore prices dropped slightly (which they are not expected to do), the benefits of buying imports right now would still not outweigh the risks. For offerings on the table today, deliveries are pushed out until June or July. Even though it looks like a remote possibility now, by June domestic numbers could possibly peak. For the most part, buyers are being very cautious and are only buying what is needed since demand is just mediocre, prices are high, and the market could turn around very quickly.
Globally, scrap and billet prices are very high, leaving foreign mills no choice but to up their numbers on a weekly basis. With other markets such as the Middle East and Asia seeing a much stronger demand than the US, there is no need for foreign mills to offer US customers lower prices for business as they can easily find buyers at high numbers.
In fact, US prices are lower than most other regions and, therefore, there is a significant amount of billet and merchant bar exporting taking place in the US. The primary destinations for merchant bars are Latin America and the Caribbean, while the main destination for billets remains the Far East.
There is hardly anything to report on the import side. In just two weeks, Turkish merchant bar offers to the US have increased by $4.00 cwt. ($88 /mt or $80 /nt). This increase is following a string of significant increases since the beginning of the year. Turkish offers now range from $51.00 cwt. to $52.00 cwt. ($1,124 /mt to $1,146 /mt or $1,020 /nt to $1,040 /nt) FOB loaded-truck, US Gulf ports, though there are no takers at this price level, even for the hard-to-get, small items.
Other previous import sources such as Taiwan, China and Peru remain quiet, without any new offers.