Most merchant bar distributors are keeping their inventories low—even lower than normal for this time of year—until they see real improvement in the economy. Buyers still observe weak demand for merchant bars, but the producers have already adjusted to low levels of demand and therefore prices remain more or less stable, despite a few spotty deals. But hope is on the horizon—US economy is slowly recovering and construction activity is expected to pick up soon in the spring.
Domestic transaction prices are generally consistent with mill list prices, but there are still deals to be had for large and attractive orders. As SteelOrbis reported earlier in the week, Nucor Bar Mill group announced both a slight decrease in the raw materials surcharge (RMS) and an increase in base prices to offset the change and keep prices stable through March. Current published domestic merchant bar transaction prices lie within the range of $37.80 cwt. to $43.00 cwt. ($833/mt to $948/mt or $756/nt to $860/nt) ex-mill depending on size, shape and thickness, an increase of about $2.00 cwt. ($44/mt or $40/nt) since January.
According to our latest surveys, shredded scrap prices are not expected to change dramatically in March, and the demand from the spring activity should remain slight; therefore merchant bar prices are likely to stay stable until the end of April.
On the import side, demand is slightly better than it’s been in the past few months. After months of no activity, buyers report some bookings from Turkey for coastal regions. But for inland destinations, offers from Turkey remain uncompetitive. Most Turkish offers are between $34 cwt. and $35 cwt. ($750/mt to $772/mt or $680/nt to $700/nt) FOB load truck to Gulf Coast. Turkish merchant bars are also delivered via containers to East and West Coast ports.
Taiwanese offers are a bit higher, limited in size range and not too competitive, in the $35.50 cwt. to $36.50 cwt. range ($783/mt to $805/mt or $710/nt to $730/nt) FOB loaded truck in West Coast. However, Mexico is experiencing decent demand, with offers in the $32.50 cwt. to $33.50 cwt. range ($717/mt to $739/mt or $650/nt to $670/nt) delivered to US border states.
According to the latest import license data from the US Import Monitoring and Analysis System (SIMA), merchant bar import permits increased in January from December (preliminary census data), at 7,665 mt and 6,980 mt respectively. Most merchant bar imports in January came from Canada (3,613 mt) and Mexico (3,083 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).
