Rebar players are gearing up for a busy week as customers begin to place orders before producer price increases take effect.

 

"This is going to kickstart some buying, but mills are still hoping for consistent buying and not binge-buying," an Eastern source said of the latest move to increase prices. "It has been three months since mills last raised prices."

 

Nucor Corp., Charlotte, N.C., advised customers that it is increasing all prices for concrete reinforcing bar by $20 per ton ($1 per hundredweight) effective with Oct. 1 shipments.

 

Larger-sized material in 20-foot lengths will increase immediately by $10 per ton (50 cents per cwt), with the $20-per-ton increase tacked on when October starts, resulting in an overall $30 increase.

 

Existing orders are price-protected, provided they ship by Oct. 1. Prices on merchant bar products will remain unchanged, Nucor told customers.

 

The industry has been waiting for a move by Nucor following Gerdau Long Steel North America’s August announcement that it would increase prices effective Sept. 19.

 

"The mills are shrewd and they have increased the size that is in big demand immediately. The main kickers (drivers) in the business are the prestressed buyers and rebar fabricators, who need the longer sizes," a Southeastern distributor said. "This whole week should be fun where you can make a few deals and use the increase to your advantage. We are just as guilty as the big guys and we like to make a buck, too. We all gotta eat."

 

If the Oct. 1 increase takes hold, this will push market transaction prices for Grade 60, No. 5 rebar to about $760 per ton ($38 per cwt). Merchant products, including 2-by-2-by-¼-inch angles, will remain at $864 per ton ($43.20 per cwt), 3-by-3-by-¼-inch angles will remain at $844 per ton ($42.20 per cwt), 8-by-11½-inch channels will remain $854 per ton ($42.70 per cwt) and ½-by-4-inch flats will remain at $869 per ton ($43.45 per cwt).

 

With scarce inventory on the ground and none coming in on the water, the increase is expected to be fully embraced by the industry.

 

"Everyone saw this coming. We knew there hadn’t been any increases, there is limited bar around and there is no extra, and there are no imports coming in," the Southeastern distributor said.

 

It is unlikely that Tampa, Fla.-based Gerdau will be able to gain the increase on all rebar prices effective Sept. 19 since Nucor has set the bulk of its increase for October, sources said. Gerdau didn’t respond to a request for comment.

 

Nucor is setting up an increase to start off the fourth quarter, as it is fully aware that the final three months of the year bring buyers to the table, according to market sources.

 

"October to December is prime time for contractors to work and get things done because the summer heat is over and the weather is still mild. If you look out over the next 90 days, you know product is going to move," the Eastern source said.

 

The decision to elevate prices in a flat scrap environment can help mills get ahead of higher scrap prices, which are anticipated as winter weather sets in. "Raising prices while buying scrap at today’s numbers will enable mills to get ahead of the curve," a Midwest broker said.

 

The dynamics of the rebar market make the timing right for an increase, a Midwest service center source agreed. "The market is strong enough to support a slight increase in rebar transaction pricing."