Market’s Struggling with Availability as Demand Outruns Supply

“I believe we are just seeing the beginning of the actual shortages that will get significantly worse over the next few months. At a macro level, we are way short of steel supply for the demand we will have for the next few months. Up to this point everyone has been filling holes out of inventory or the service centers buying from each other. That is coming to a halt. Our sales to the trade are a small fraction of what they were a month ago as we need to keep every available ton we have for our contract business. With absolute lack of imports in November and December, this situation is going to get a lot worse. We have had our light gauge coated customers on allocation for over a month, and things won’t get any better until imports arrive in April. The Dofasco situation [furnace outage] has Canadian customers in an absolute panic, as it should. Hold on, this is going to get a lot worse before it gets better.”

“I spoke to commercial managers at several mills this morning. They have no spot tons available until February at the earliest. In the meantime, they believe scrap will be up $100 by mid-January. Any new tons sold will be using the higher priced scrap. I have never seen a market like this. It does not matter what you are willing to pay a mill, there is simply no spot available until February/March. Many service centers are simply desperate.”

“We are playing whack-a-mole with late orders. We have had inquiries from other service centers, but we have no product to offer.”

“We have been advised by our mill reps of limited availability on the spot market for the foreseeable future.”

“In some areas we are already seeing shortages and, although not allocation, limited availability.”

“We’re there [shortage], just no one is willing to admit it.”

“We see a shortage coming for some products, such as CRC or coated, but not for HRC as more and more capacity will come online.”

“Already there. Got a phone call this morning that my Jan/Feb orders are being pushed out.”

“Supplies will be tight as long as demand continues to exceed expectations.”

“The word allocation won’t be used.”

“COVID issues and the latest issues at Dofasco are just prolonging [the shortage].”

“We’ll be OK, as long as we don’t shut down again for COVID.”

“Considering the limited inventories at service centers and the likelihood of COVID-related production issues, I think the tight market is here for at least 60-90 days. Should the virus negatively impact demand, all bets are off.”