US merchant bar mills have been attempting to keep prices firm and stable for July shipments, following last month's $20 /nt ($1.00 cwt. or $22 /mt) price hike announcement on June shipments. But while published transaction prices are expected to continue trending sideways, spot prices are demonstrating softness.
Current published merchant bar transaction prices remain within the range of $34.05 cwt. to $39.25 cwt. ($751 /mt to $865 /mt or $681 /nt to $7685 /nt) ex-mill depending on size, shape and thickness.
US scrap prices have now regained some of the ground they lost in the last part of May and are now trending sideways. Still many customers who could buy sizable orders will be asking for discounts off the list price. However, since firming up published prices last month, some domestic mills have become a bit more bullish and started refusing orders at bargain price levels they had accepted just a few weeks prior. Still, not all the producers are equally disciplined. One merchant bar distributor told SteelOrbis, "Regardless of how pricing goes right now, domestic mills are desperate for business, and service centers know it."
Nonetheless, there is no reason for the official price list to go down anytime soon, due to a lack of import competitiveness, especially considering that the primary foreign sources offering merchant bars to the US are starting to firm up their pricing as well.
While Mexico remains the most competitive merchant bar import source for the US, the majority of their offers have increased by about $1.00 cwt. ($22 /mt or $20 /nt) over the past couple weeks. Most offers can now be found for around $27.50 cwt. to $28.00 cwt. ($606 /mt to $617 /mt or $550 /nt to $560 /nt) delivered to California and Texas. While Mexican offers appear to provide a significant price break over US domestic offers, US mills remain extremely aggressive against any business they may lose to an import counterpart. Some US domestic service centers have even admitted they've solicited quotes from Mexican mills on significant-sized offers to use as a bargaining tool with US mills.
Meanwhile, Turkish offers have been cropping up a little more frequently over the past couple weeks; however, with the exception of some niche items, their pricing is not competitive enough for traders to seriously consider. Most Turkish merchant bar offers have actually firmed up by about $0.50 cwt. ($11 /mt or $10 /nt) over the past couple weeks and now range from approximately $31.50 cwt. to $32.00 cwt. ($694 /mt to $705 /mt or $630 /nt to $640 /nt) duty-paid, FOB loaded truck in US Gulf ports.
License Data from the US Steel Import Monitoring and Analysis System (SIMA) show that total monthly merchant bar imports decreased again in May for the fifth consecutive month, totaling only 4,916 mt. Canada remained the top import sources in May, at 3,066 mt; however, Mexico replaced Turkey in May as the second-largest merchant bar import supplier to the US, with 1,693 mt. Turkey was still the third-largest merchant bar import source for the US in May, but supplied less than 100 mt, which is down drastically from the 1,122 mt from Turkey in April. The reported 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).