July 5, 2002 

REBAR PRICES FIRM
(Amidst Weak End User Market)

As expected, rebar prices have continued to strengthen albeit at a slower pace. As of today, prices for Intermediate Grade 275 (ASTM A615 Grade 40) are at less 2% and prices for High Tensile Grade 415 (ASTM A615 Grade 60) are at less 4% from the July 5, 2002 price list used by the industry. However, the rebar market remains weak with very few major projects ongoing. In fact the main brunt of the steep increase in billet prices has been borne by local steel mills and have not been fully passed on to buyers.

Billet prices have increased over the last month, as expected, but these increases have exceeded expectations, with increases of between$15-25/tonne occurring in most major markets since May 2002. Current billet prices CNF Manila are at USD 221/mt ex Black Sea and USD 225/mt ex Far East Port compared to billet prices in June of USD 215/mt and USD 221/mt, respectively. The upturn of steel pricing this time could be a major one, potentially breaking previous peak levels in 1998 due to: (1) robust demand in China (that accounts for one-quarter of global demand) and Korea; (2) much reduced exports from Russia; and (3) plant shutdowns in the US and Europe. Scrap Prices remain firm. Scrap traders are expecting prices to increase over the course of this month because of rising domestic and export demand.