After a surprise decrease for June US merchant bar prices, mill offers are set to rise again as of July.
Last month's price decrease for US domestic merchant bar surprised many, considering decent demand levels and steady purchasing activity, and the move was entirely blamed on a soft scrap market (even though at the time of the announcement, scrap prices were already predicted to rise the following month). Therefore, many in the industry accurately predicted a price increase for July shipments once scrap trended up again in June.
Two different price ideas emerged in the market following the scrap announcement--Gerdau Long Steel North America jumped the gun with a $1.50 cwt. ($33/mt or $30/nt) increase, followed by a more measured response from Nucor of $1.00 cwt. ($22/mt or $20/nt). Sources tell SteelOrbis that market prices will only rise by $1.00 cwt. for July shipments, putting the range for domestic merchant bar at $45.30-$50.50 cwt. ($999-$1,113/mt or $906-$1,010/nt) ex-mill, depending on size and shape, and mills are expected to successfully push through the full amount.
Import offers for merchant bar are also on the rise, but considering the recent rollercoaster of US domestic prices, US buyers are reluctant to book tons that won't arrive until August or September (early speculation for July scrap prices is pointing upward, but afterward scrap is expected to tick down during the rest of summer and into fall). Therefore, current Turkish prices of $42.00-$44.00 cwt. ($926-$970/mt or $840-$880/nt) DDP load truck at US Gulf ports--a $2.00 ($44/mt or $40/nt) increase from last month--are not attractive enough right now for US buyers to bite.
As for merchant bar currently arriving in the US, it looks like June shipments will likely match the stable trend apparent through April and May. According the US Steel Import Monitoring and Analysis System (SIMA), the US has imported 3,778 mt of merchant bar as of June 14, a little over half of April and May numbers (6,734 mt and 6,745 mt, respectively). Additionally, after consistently ranking as the US' number three source for imported merchant bar, Turkey has ranked number two so far in June, with 1,105 mt, just above Mexico's 1,039 mt.