Steel Market Chatter This Week

Where do you think steel prices will bottom, and when? Or did they bottom this month? Why do you think that?

“Wish I knew but I hope its soon!”

“Near bottom….not much more room to go.”

“The low numbers are less available. We probably have bottomed.”

“Low $700s in Q4.”

“I can’t imagine that steel prices have hit a bottom just yet. If demand continues to slow, I suspect steel pricing will continue to go lower.”

“I expect them to bottom out mid-to-late October between $700–799.”

“$700 for HRC and $1,400 for plate by mid-September.”

“I knew we’d see a dip in the indices below $800/ton, and we’re there—so I think we have to be getting close. Maybe a week or two more?”

“Yes but not until next January/February.”

“$800–900 in September/October.”

“HRC prices will bottom in October at $700/ton. I feel in November things will start moving back up as companies plan 2023 requirements.”

“I think the bottom is over the next month, but it may be short lived, if the union negotiations go smoothly.”

Has your inventory strategy changed because of the extreme volatility of the last two years? Are you carrying more or less inventory than you did in the past?

“Staying disciplined even when prices are dropping… keeping consistent monthly purchases instead of waiting for the perfect time. The bigger sin to paying too much is not having enough.”

“We are sitting on more steel than before, due to the extended lead times over the previous 12–16 months.”

“We do not speculate, so the strategy is the same: avoid carrying high-priced inventory.”

“No, due to system improvements we carry less inventory.”

“Carrying less but pricing is starting to bottom so we are starting to procure more stock.”

“We are still trying to carry less and less. “2.5 months-on-hand is the new 3.0.” We’re also looking to lock in tons and pricing with customers wherever we can—for as long as we can!”

“More inventory due to customers pushing out orders and not meeting forecast.”

“We are carrying about the same. Currently we are buying what we feel we will need. At times in the past we have made larger purchases in anticipation of prices rising (example: in late February of this year).”

“We are on the low side of our inventory target range.”

“Just enough inventory to keep the shelves from being bare.”

Is demand improving, declining or stable, and why?

“Declining to stable, depends on market and customer.”

“Demand is stable but seems to be teetering on dropping some more.”

“Slow but somewhat stable due to US economic policies.”

“Demand is stable but I feel demand will be lower for Q4 due to interest rates.”

“Demand is stable overall, with intermittent fluctuations day to day.”

“Stable to slight decline.”

“Unfortunately I think demand is falling. Partly because the price erosion and partly because the normal ‘Summer Doldrums’.”

“Improving. Inventories are too low and have to be replenished.”

“Better than July when auto was down, but spot buying is still down as buyers remain concerned on what the market is doing.”

Are supply chain issues getting better or worse, and why?

“Better—shorter raw steel lead times…stability somewhat returning to workforce.”

“They seem to be about the same.”

“Supply chains are fine with short lead times.”

“Better for many products but we still have a few items that have extremely long lead times (vendors actually don’t even give a lead time because they don’t know when they will get the products). For raw steel we are not having any issues.”

“Still bad…not necessarily worse.”

“Worsening for shipping, electronics, plastic, chemicals and gases. Better for steel. No employees to be found in manufacturing.”

“Some supply chains are improving—southern California port congestion continues to be a problem for us.”

“They are not getting better but I would say they are not getting better. I still do not see any strategy to improve bottlenecks at ports and trucking availability.”

“They’re staying the same (read: poor). Unfortunately the negative news coming out of the West Coast ports this weekend isn’t exactly making me feel all ‘warm-and-fuzzy’.”

“On our side, they seem to be relatively stable…”

“Staying the same: poor.”

Are you seeing the impact of new North American capacity in the market? If yes, how so?

“Believe mills are not producing full out to keep lead times at present level.”

“Yes—more negotiating.”

“We are, however, now some of the older mills are chasing numbers down, where for the past few months, it had been the newer guys.”

“Perhaps a bit in the Southwest…”

“Yes, it is pushing pricing downward with lead times now at six weeks.”

“Not yet…”

“No significant impact yet.”

PSA: If you have not looked at our latest SMU Market Survey results, they are available here on our website to all Premium members. We often refer to this as our ‘Steel Market Trends Report,’ and we publish updates every other Friday. We encourage readers to explore the full results, as we simply cannot write about all of the information within. After logging in at SteelMarketUpdate.com, visit the Analysis tab and look under the “Survey Results” section for “Latest Survey Results.” Historical survey results are also available in the Survey Results section under “Survey Results History.” We will conduct our next market survey next week, contact us if you would like to have your company represented.

By Brett Linton, Brett@SteelMarketUpdate.com