May 19, 2002 

REBAR PRICE INCREASE
(Trend Expected to Continue)

Local rebar prices have increased drastically with Structural Grade 230 now selling at less 2% to net price based on the Price List depending on volume. Prices for Intermediate Grade 275 and High Tensile Grade 415 have increased to less 4% and less 6% respectively with prices seen to increase further.

Although the appreciating peso currently pegged at P49.46 to the US dollar has tempered the billet price increases somewhat, it has not been enough to arrest the climbing cost of billet materials.

There has been a series of renegotiation and delays of billet materials from Black Sea suppliers which has exacerbated the already tight supply and low inventory levels of local mills. In the meantime, billet suppliers are not offering any significant quantities of billets. Current billet price indications are at USD 213/mt to USD 215/mt levels.

So far, Asian steel prices overall have recovered a bit more strongly than expected, and the recovery is likely to continue given low inventories, rising demand, and continued supply cuts in Japan coupled with strong demand from South Korea, and Taiwan. China is also said to be active in the market.

Looking ahead, global billet prices are expected to increase further over coming months. Scrap prices, which have already risen strongly since January, are expected to continue to increase. In addition, the sustained recovery in global economies, coupled with seasonal factors, is likely to result in a rebound in demand, and consequently higher finished product prices.