With several US mills officially announcing price hikes for rebar products this week it should push prices higher, but how much of the increase will stick remains to be seen, market sources said Thursday.
Gerdau Long Steel North America and Commercial Metals Co. independently announced increases on rebar products this week. Gerdau's increase, which it said will raise transaction prices $30/st, takes effect March 21, while CMC said it will raise prices by $20/st effective April 1.
Buy-side sources said they had been anticipating higher prices for April ahead of the announced increases given scrap's increase in March and early indications it could go up again in April.
While higher raw material costs could provide some upward mobility for rebar prices, it remains to be seen if demand will be high enough to achieve the full $20 or $30 increase, said one Southeast fabricator.
"Everybody would like for prices to go up, but you want to see demand drive that rather than iron ore and scrap," he said. "Demand is key and that has been so sporadic that an increase may not stick."
Any announced price increase could stick to a degree, but one Midwest distributor said he would be surprised if anything more than $20 would take effect given the current market conditions.
Rebar demand should pick up in the coming weeks as the US heads into construction season, but demand in February and into March has been less robust, according to a mill source. Additionally, although Turkish import offers for rebar have increased the domestic market still remains under pressure, he said.
Given the current volatility in the import market, he said a lot of buyers seem to be waiting longer to make any purchases, both from foreign and domestic producers.
"People will buy what they have to buy, but I'm not sure anybody wants to take on a huge order right now," he said. "...With pricing this volatile the dynamics are changing and I think a lot of people just don't want to take a gamble."
With demand relatively low, mills had been offering more aggressive discounts to secure large orders ahead of the announced increases, said the Southeast fabricator.
"It doesn't matter what the price is, if you don't need it, you're not going to pile it up," he said.
Platts maintained its southeastern US rebar price assessment at $455-$470/st ex-works on Thursday.
