Steel Products
Final Thoughts
Written by John Packard
March 13, 2013
Our SMU Price Momentum Indicator continues to be at Neutral and has been for 14 weeks. We do not yet see enough momentum to cause prices to rise or fall quickly. The market appears to be in a slightly over-supplied basis and demand – at the moment – is flat. Not dead by any means, but many service centers are noting that some customers are doing OK while others appear to be struggling a bit.
Inventories appear to be balanced to slightly higher than needed. Our survey from last week found both service centers and manufacturing companies as reporting their buying patterns as “maintaining” existing inventory levels (manufacturers = 72 percent, service centers = 62 percent) or reducing inventories (manufacturers = 25 percent, service centers = 33 percent). These results are consistent with what we found during the middle of February. We do not believe there will be any rush by either service centers or manufacturing companies to book out orders.
One service center executive told us late this afternoon that he believes the bottom of this cycle will only last three weeks – about the length of HR lead times. He surmised that within three weeks the mills will need orders.
Many buyers told us over the past two days that the increase in scrap prices for March are not enough to move prices much higher from here. The expectation by many of the steel buyers with whom we spoke is that April scrap prices will ease. They also pointed to the international markets where iron ore prices have dropped.
We continue to take a neutral position as there are some maintenance outages planned and maybe some capacity might be removed from the marketplace if orders don’t flow as expected over the next few weeks. We also have negotiations at USS Lake Erie works in Canada on a contract which expires in the middle of April. USS has stated they expect the contract to be settled.
Your comments are welcome – you can send them to me at John@SteelMarketUpdate.com
As always your business is truly appreciated.
John Packard
Read more from John PackardLatest in Steel Products
Atlas Tube debuts ‘HSS Connections Hub’
Atlas Tube, part of Zekelman Industries, has introduced an engineering resource aimed at simplifying Hollow Structural Sections (HSS) connection design for structural engineers and fabricators.
Nucor keeps HRC price unchanged
Nucor paused its weekly hot-rolled (HR) coil price this week, keeping it flat for the first time since Jan. 21. This comes after a nine-week rally that saw the company increase prices by double-digits for eight of those weeks.
Nucor increases plate prices by $40/ton
Nucor aims to increase prices for steel plate by $40 per short ton (st) with the opening of its May order book. The Charlotte, N.C.-based steelmaker said the increase was effective with new orders received on Friday, March 28, in a letter to customers dated the same day. The company said the price hike applied […]
US CRC price gains ground over imports
US cold-rolled (CR) coil prices increased again this week, while offshore prices declined.
SMU Steel Demand Index momentum slows
Steel Market Update is pleased to share this Premium content with Executive members. Contact info@steelmarketupdate.com for information on how to upgrade to a Premium-level subscription. Growth in SMU’s Steel Demand Index eased in March after reaching a four-year high in late February. Despite a moderate gain, the index remains in expansion territory. The Steel Demand […]