Have Prices Peaked? SMU Sources Divided

Because the price trend is no longer clear, SMU changed its Price Momentum Indicator from Higher to Neutral this week.

Here’s what some respondents had to say about further price hikes:

• “Prices are meeting a lot of resistance, and it’s gone quiet.”
• “I think movement will be pretty subtle. I see prices from $47/cwt to $53/cwt for the balance of the year (+/- $2/cwt from present).”
• “It will be nominal. I still believe HR and plate could move higher once September /October lead-times get filled.”
• “I see prices rising maybe another $20 a ton from here through Q4. I see mostly a plateau from $880-920 for the next 90 days. HR remains much stronger than all other products.”
• “I feel like CRU will continue to rise slightly due to strong domestic demand and mills still getting the price they desire for spot buys. Demand is starting to soften, though, and prices could fall very quickly.”
• “I think prices will rise gradually and very cautiously in the short-term. From the end of August and beyond is where the market has liability, depending on demand and volume of imports.”

Difficult to predict is the volume of steel imports that will reach U.S. shores in the second half carrying the Trump administration’s 25 percent tariff. Foreign steel offers are on the upswing, say several SMU sources, which could have a moderating effect on domestic steel prices:

• “I believe import activity is starting to pick up as prices remain high and importers and customers have discovered ways to circumvent Section 232.”
• “There’s a little more action than previous months with foreign offers, but the numbers still are not making any sense to buy.”
• “We are seeing lots of CR and HD offers, but rarely any HR offers.”
• “Offers are spotty, and sourcing is moving around. Many of the offers are ‘subject to tariffs.’ There is steel available, but most of the sourcing that is not under tariff is under quota. Prices are high enough that the buys are not a slam dunk, especially for end-of-year deliveries.”
• “Foreign prices are very good, even with the tariff compared to domestic spot and CRU pricing. We continue to place import orders for fall at price points over $100 per ton cheaper than domestic, including the tariff.”
• “We’ve placed some orders for HDG for September/October arrival at about a $100-130/ton discount to current domestic spot prices.”
• “Offers seem to be growing from Vietnam, Turkey and Russia as those countries struggle with what to do with their exports.”
• “We have seen a slight pickup in offers on galvanized and Galvalume, but nothing major. On certain products, yes, it makes sense to consider foreign, given the spread. But we prefer to have a customer order to back up a foreign buy at this time. Interestingly, many seem to think the market may fall later this year. If that belief is widespread, it may deter significant import booking (for fear of lower market prices when that steel arrives). If so, it will actually work to keep the market firmer for longer.”

Delivery vs. Supply Issues

Some service centers report difficulty getting product, especially plate, but mostly because of delayed deliveries, not limited supplies:

• “Most mills are producing on time, it is transportation that remains difficult.”
• “We are mostly dealing with late delivery issues, not so much availability.”
• “Not short supply, just typical late deliveries. Contractual tons are being held at limits from the integrated mills, but the mini’s have flexibility for added tons.”
• “All of our challenges are with transportation right now, trucking and rail.”
• “About 1 in 3 orders are late, on average.”
• “Plate mills are basically providing allocated or historical buy pattern tonnage each month.”
• “Mills had some tough outages. SSAB and Mittal are on allocation, and plate less than 3/8-inch is tougher to come by, for sure.”
• “We’re on allocation for mild carbon as rolled plate. Normalized and Q&T are wide open.”
• “Our supplier deliveries have not been impacted or orders pushed out.”
• “Things are settling down now and shipments are more on time.”