US merchant bar market: Good times

Last week, Nucor finally gave in to upward pressure from the market and raised their transaction prices for merchant bars and structural products by $20 /nt ($1.00 cwt. or $22 /mt). There was really no reason not to. Consumption levels are strong, plants are full, and moreover, import offers have been going up more rapidly than ever before in the last 6 months. The $20 /nt increase is split between the $8 /nt Raw Materials Surcharge (RMS) increase and a $12 /nt increase in the base price. Expect scrap to continue its slow ascent and for long products to possibly follow it in the next couple of months. With the new increase, which will be effective as of May 1, domestic merchant bar prices range from $28.95 cwt. to $36.95 cwt. ($638 /mt to $815 /mt or $579 /nt to $739 /nt), depending on size, shape, and thickness. Most sizes are on the lower end of the pricing spectrum, making imports prohibitive. Only small sections such as 1/8 and 3/16, flats, and small angles are sold at a huge premium where we see most small sections are imported. In the meantime, the import market is moving in the same direction, only more strongly. There are Turkish and Taiwanese offers along with the usual, domestically-priced Mexican and Canadian imports. Billet prices have been going up in Asia and Turkey and and their merchant bar pricing reflects this. Import prices for Turkish merchant bars and small sections have gone up even further since we last reported them two weeks ago, and are now being offered from $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 /mt or $580 /nt to $600 /nt) FOB loaded truck in US Gulf ports. This represents a $1.00 cwt. ($22 /mt or $20 /nt) increase. Taiwanese numbers are somewhat lower, but they can only penetrate the West Coast market due to high freight rates from Taiwan to the US Gulf. Going offers from Taiwan are about $28.50 cwt to $29.50 cwt. ($628 /nt to $650 /nt or $570 /nt to $590 /nt) ex-dock Los Angeles. Still, there is more room for import prices to roam, and the pricing trend is slightly up.