With shredded
scrap pricing on the rise,
Nucor has decided to hold firm and keep
merchant bar prices for January at December levels. As announced to customers Wednesday, effective for January shipments,
Nucor has increased their RMS by $0.50 cwt. ($10 /nt) to $3.40 cwt. ($68 /nt) as shredded
scrap prices have inched up approximately $10 /long ton.
Nucor is making a corresponding downward adjustment to base prices, keeping net transaction prices unchanged. Domestic
merchant bar prices will continue to 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.
Merchant bar demand is holding steady due to the still-robust non-residential
construction market. Despite slow residential
construction and the holiday season, mills still have healthy order books. There have been very few imports coming into the
US as winter as distributors are still in “inventory reduction mode.” United States Import Administration license data shows quite a decrease in worldwide
merchant bar exports to the
US from October 2006 to November 2006, a difference of 7,743 metric tons. Halfway through the month of December, the total of
merchant bar imports for the month has reached 10,106 mt. Although these numbers may look low, when comparing import tonnage to that of last year, the numbers for this year are decent. From January – October 2005, total worldwide
merchant bar exports to the
US reached 186,438 mt. From January – October 2006, total worldwide
merchant bar exports to the
US reached 233,826 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). Putting the slower months behind them, buyers are concentrating on 2007, planning to replenish their inventories with late first quarter arrivals. There are some bookings taking place from
Taiwan,
China, and
Turkey for March shipments.
China, a newcomer to the
US market for merchant bars, has reportedly booked large orders for the
US, however, the quality of the ASTM standard product is still widely unknown. Next year, it is believed that
China will be a main source for merchant bars. Due to a tight
billet supply in
Turkey,
merchant bar offers have gone up $0.50 cwt. since our report two weeks ago. Current offerings now 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. Taiwanese
merchant bar offers have 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. Buyers in the Gulf require their merchant bars to be wrapped due to the high humidity experienced in that region, and Taiwanese mills generally do not wrap their bundles.