US HRC-rebar price spread reverses 2016-18 trend

As 2019 draws to a close, Fastmarkets examines the underlying factors driving the spread between US hot-rolled coil and steel reinforcing bar prices throughout the year.

Fastmarkets' price assessment for steel reinforcing bar (rebar), fob mill US averaged $33.12 per hundredweight at the midpoint in January-November, while the steel hot-rolled coil index, fob mill US averaged $29.77 per cwt, creating a spread of $3.35 per cwt during that period.
That spread is a reversal from last year - hot band prices averaged $6.35 per cwt above rebar tags in 2018 - and marks the first time since 2015 that rebar prices have exceeded HRC on an annual basis.
Hot-rolled coil's applications within the oil and gas, infrastructure and agriculture sectors - among others - leave that product vulnerable to end-market instability. Rebar is primarily used in the construction sector, and therefore is less exposed to the headwinds that affect overall steel demand, industry participants explained.

"[HRC is] more volatile than rebar," a mill source said. "We haven't seen rebar prices climb to $900 [per ton] in...

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