US long product prices were unchanged from the prior month as tight finished steel supply offset downward pressure from a decline in domestic scrap prices. Demand remains steady, although service centre inventories have stepped higher. In most markets, participants do not expect an increase in scrap prices to put upward pressure on finished prices because higher domestic prices will lead to imports becoming more viable for buyers. Long product and scrap prices shared a strong correlation from December 2017 through to July 2018 as both prices increased m/m. Every $1 /t increase in rebar prices fob Midwest mill resulted in an increase of 29￠/ t in #1 HMS delivered mill Great Lakes. But this relationship has unravelled as long product prices held and scrap prices declined by about $50 /t in August and September. It is unlikely these prices will recouple in the remaining months of 2018 as scrap prices rise on seasonally tighter supply and long product prices change little.
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