As scrap prices plummet, steel follows suit, with certain producers cutting back prices more than a Wal-Mart back-to-school special. Producers have reported decreases as major as $70 per net ton for rebar and $50 per ton for merchant bar, leaving the new prices at $986 and $994, respectively.
But these reports don’t tell the entire story. Purchasing.com reports that the prices are drawing even lower than some steel mills choose to admit. “While we support the fact that globally the current bar market softness is due mostly to seasonal issues and that we will see a rebound in global demand in the fourth quarter, we believe a measured decrease in transaction prices is warranted at this time,” Purchasing.com quotes a letter from Nucor.
In addition to lower scrap steel prices, low demand has been another factor in the fallen steel bar prices, as the number of construction projects dwindles. Some companies have considered cutting production to maintain higher prices, but still believe that demand weaknesses are “temporary.”