US Merchant Bar Market: Next week may bring price hikes

As we near the second quarter, demand in the merchant bar market is clearly strong. If we continue to see increases in demand during the second quarter, and we should as the construction activity picks up because of the warmer times ahead, domestic merchant bar producers will definitely be compelled to raise prices. So far, the domestic pricing has remained fairly stable, with a price trend that is slightly up. Scrap that affects the effective pricing for bar products has been flat, easing any downward pressure. Domestic prices range from $27.95 to $35.95 ($616 /mt to $808 /mt or $559 /nt to $733 /nt) FOB mill depending on the size. Smaller items are more time-consuming to produce, and are therefore much higher priced than the larger items. On the import side, since our last report in mid-February, import prices for Turkish merchant bars and small sections have not changed. Traders continue to offer Turkish merchant bars from $26.50 cwt. to $27.50 cwt. ($584 /mt to $606 /mt or $530 /nt to $550 /nt) FOB loaded truck in US Gulf ports. On the West Coast, prices have also remained unchanged, with Taiwanese merchant bars still being offered from $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt). For imported merchant bars, the pricing trend remains up since both the Asian and Black Sea markets have been experiencing significant scrap and billet price movements. Sooner or later, high billet prices will take their toll on the merchant bar prices, both from Turkey and Asia.