As Thanksgiving just passed and the December holiday season is approaching, the steel market has been pretty quiet. The
merchant bar market, though it has picked up from last month, is still pretty calm, with a neutral pricing trend.
Imports coming in have been few as winter inventory reduction mode is still taking place and will continue throughout December. Buyers are concentrating more on 2007, looking to replenish their inventories for late first quarter arrivals. There are some bookings taking place from
Taiwan,
China and
Turkey for March shipments.
The non-residential
construction market is still doing well, providing some demand for merchant bars.
Domestic customers are waiting to see how
scrap prices will come in for December, which is a good indication of how the market will be in January. With the market showing a little more strength these days, if
scrap prices remain the same, market players believe
Nucor will not lower their
merchant bar prices for January. Even if
scrap does drop some,
merchant bar prices could still beat the odds and remain neutral.
For now and throughout the month of December, merchant bars will 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.
With demand in the
US just okay, import prices have remained the same for the past month. The import pricing trend is neutral, but is believed to go up slightly in the near future.
The Chinese
billet export tax has been pushing
billet prices up in Asia, leaving room for other Asian
merchant bar prices to go up as well.
China, which is a relatively new player in the
US market for merchant bars, has been shipping to the West Coast with offers lower than
Taiwan and
Turkey.
SteelOrbis has learned Chinese structurals are being offered at $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 /mt or $580 /nt to $600 /nt) FOB loaded-truck, West Coast 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.
Turkish
merchant bar offerings have also remained the same, still ranging from $31.50 cwt. to $32. 50 cwt. ($694 /mt to $717 /mt or $630 /nt to $650 /nt) FOB loaded-truck,
US Gulf ports.
License data from the United States Import Administration shows a significant decline in import activity from October to November 2006. World-wide exports to the
US for small sections in October 2006 totaled 24,958 metric tons while November numbers (data collected through November 28, 2006) total 14,280 metric tons. For the imports that were delivered to the
US in November,
Canada and
Mexico were major players with tonnage that totaled more than half of the 14,280 metric tons the world exported to the
US. 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).