Steel Market Chatter This Week

Do you think the $60/ton sheet price hike announced by Cleveland-Cliffs on Monday will stick?

“Let’s see if anybody else jumps into that arena. If more mills come out with increases then maybe it will stick.”

“Not sure at the moment… If demand remains flat and lead times don’t move out; not sure how it will stick.”

“I doubt it. All other steel types are still decreasing prices.”

“Yes. Production levels, inventory levels, and import levels are all supportive.”

“No, demand isn’t there.”

“I think it sends a message to buyers that we are at the bottom, takes a while to set in.”

“No, too much capacity out there hungry for orders.”

“Unknown at this time. I’m waiting to see who bites.”

“No, the current demand situation doesn’t warrant it. Too much capacity.”

“Yes. All mills should also follow as we are starting to see. Distributors are eager to stop lowering inventory prices so most will accept.”

“I don’t. I just don’t think the strength is out there in the marketplace – overall demand seems soft and the mill lead times are still too short. I’d be shocked if we see the infamous “mill discipline” come into play.”

“Yes, because the bottom has been touched.”

“I hope so.”

“I do not feel it will stick. I feel it may pause the downward slide, but the imbalance between supply and demand will prevent prices from increasing.”

Where do you think steel prices will bottom, and when? Or have they already reached a bottom?

“December and spill over into January due to limited demand.”

“We’re getting close, but we’re not there yet. We’ll see if this new hike from Lourenco stops the slide – my guess is it won’t.”

“Hopefully it has already bottomed out, everyone down the supply chain has budgeted much higher cost basis on metal so they can pay last year’s prices…they are not lowering prices to down the line.”

“I think December is the traditional bottom for pricing that has been headed downward in recent months.”

“They already bottomed out.”

“Hoping $600/ton.”

“They have bottomed in December lead time, once all mills are into January lead time, prices are up.”

“HRC – may have bottomed for now at $600. Plate has room to go… $1400 in Q1 2023.”

“I think we may be at the bottom if the mills are starting to think about price increases to stop the bleeding.”

“$600 for HRC and $1250 for plate. The supply is growing and demand is weak until the end of January.”

“HR should bottom in the next week or two once the mills fill up in December.”

“We might already be at bottom.”

Is demand improving, declining or stable?

“Demand has declined over Q4, expect Q1 to ramp up with January not being a typical January.”

“Declining in some cases as folks draw down year-end inventory. Plate demand may be ticking up just slightly as service centers return to fill holes. Still don’t think anyone is buying more than they need in late.”

“Our demand has stayed pretty stable. We have a seasonal decline in one of our product lines but that is expected.”

“Demand while soft is fairly stable but future weakness is causing many to hold back buys.”

“Staying consistent with shipments last year.”

“Declining, year-end is always slow and overall demand is weak with inventories starting to grow.”

“I would say stable-to-declining. Just not a lot of bullishness out there, especially on the SSC side.”

“Demand is still stable at best.”

“Appears to be improving as end users in our sectors have depleted their inventories and have increased their orders as a result.”

“Seems to still be stable based on sales/releases.”

Do you plan to change your spot to contract mix in 2023?

“We will increase our contract participation as the mills have become much more reasonable.”

“Yes, much more wary of contract.”

“May go with contracts in January as the bottom will be hit.”

“Yes, we will be much less contract next year.”

“No change – we only do spot purchases.”

“We will most likely do a bit less contract, just based on customer wishes.”

“Not at this time.”

“Probably not changing.”

“Still working through that one…”

Are you seeing the impact of new North American capacity in the market?

“No, the issue is demand driven not supply driven.”

“Pricing on pipe and plate at services centers has dramatically slowed and mill direct buying has picked up.”

“We are indeed. [A southern mill] continues to be very aggressive chasing market share. We are hearing similar things from [Mexican producers].”

“Not really, expect coming out of Q1 2023 it starts to become a factor.”

“Yes, depressed prices as [some new mills] try to gain business via price.”

“Yes, buyers are well aware of the current over capacity.”

“We have seen some, mostly in the south…”

“We all have, that’s how the market has dropped from $1,200 to sub $700.”

“I do see more [offers from EAF mills] to the West Coast.”

“Not at the moment…”

“Not really, mostly just talk from the market people that are very far removed from what actually happens on the ground.“

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