Service Centers
Spot Flat Rolled Sheet Prices: Distributors Changing Direction?
Written by John Packard
February 4, 2014
We are beginning to capture signs of a fracture in the resolve of the service centers to push higher steel prices into their end user accounts. With flat rolled steel spot prices trading within a fairly narrow and stable range for the past 10 weeks according to our SMU price indices, it should not come as a surprise that distributors have potentially reached the end of their abilities to move spot carbon sheet prices higher.
According to our mid-January steel market analysis, manufacturing companies reported service centers in ever growing numbers moving away from higher spot pricing (55 percent during the first week of January vs. 24 percent this past week) toward either stable (67 percent) or declining prices (9 percent up from 4 percent ).
Distributors also reported for the first time in a number of months that there was a small minority of service centers beginning to lower spot pricing (7 percent). This is the first time we have seen service centers reporting declining spot prices since early in the 4th Quarter 2013. As you can see from the graphic provided, the percentage of our distributor respondents reporting spot sheet prices as rising dropped from 76 percent in early December to 42 percent this past week.
Steel Market Update expects this trend toward growth in declining spot prices out of the distributors to continue – especially if inventories start to build at the service centers, if foreign steel starts hitting the distributors floors in ever increasing amounts and if domestic mill prices either move sideways or begin to slip in the following weeks.
John Packard
Read more from John PackardLatest in Service Centers
Olympic opens new Houston facility for Action Stainless unit
Olympic Steel has opened a new facility in Houston to support its Action Stainless business.
Worthington Steel sees demand improvement after earnings slump
Lower volumes and steel prices dampened Worthington Steel’s profits, but market momentum is building, the metals processor said in its most recent quarterly earnings report.
Galvanized buyers see strong demand, but uncertainty lingers
Demand is up, but tariffs raise concerns
Olympic taps Zito for new VP of development role
Cleveland-based Olympic Steel Inc. has promoted Scott M. Zito to the newly created role of vice president of business development. Zito has been with the company for more than 40 years.
Worthington Steel and Samuel to close Cleveland coil processing JV
Worthington Steel confirmed it is closing the Worthington Samuel Coil Processing (WSCP) facility in Cleveland. WSCP is a joint venture between Worthington Steel and Oakville, Ontario-based Samuel, Son & Co.