US merchant bar market – Imports trending slightly up

As the New Year approached, the US merchant bar market was looking up, with demand holding steady, import bookings taking place, and prices heading in an upward direction. Buying activity was a bit sluggish during the second half of December due to the normal holiday season slowdown. However, overall for the month of December, import buying activity picked up significantly from the autumn months. Buyers have been taking advantage of lower import prices, placing orders for March and April arrivals. However, with Asian billet prices increasing, and decent demand for merchant bars in the US, it is expected that import merchant bar prices will most likely go up before they go down again. Import merchant bar mills in all regions are starting to raise prices again, with offering prices creeping up in all regions. This will most likely result in higher priced imports in the US. Therefore, the pricing trend for import merchant bars is now slightly up, and a price increase is expected to occur in the near future.. For now, current offerings of small sizes from Turkey still 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. Also covering a smaller size range, Taiwanese merchant bar offers have also 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. Larger and structural sizes primarily come from Brazil. However, China has also been reportedly shipping large quantities of merchant bars to the US recently. These shipments should show up in the Gulf and West Coast region in March and April. License data from the United States import administration shows that the top five merchant bar exporters to the US for the months of November and December 2006 were as follows: Canada at 9,781 mt; Brazil at 9,278 mt; Mexico at 5,488 mt; Japan at 4,102 mt, and China at 3,367 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). On the domestic side, the scrap market has bottomed out and is now pushing its way back up. With scrap prices rising, it is only a matter of time before Nucor raises merchant bar prices again. Domestic mills are busy and can afford to boost prices up in Q1, following the trend of shredded scrap prices. For the month of January, prices will remain at December levels, but will most likely go up after the first month of 2007. Domestic merchant bar prices 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. Overall, the merchant bar market is picking up. The non-residential construction market is dictating demand, keeping it decent. Mills are still busy and buying activity has been increasing.