Steel Market Chatter This Week

Will Cliffs’ new HRC base prices of at least $1,300/ton hold? Why or why not?

“No. Price increases that hit at the same time summer arrives rarely stick.”

“No. Not enough traction with raw materials flat or down.”

“Eventually it will not be sustainable to keep this high of price.”

“No, market was softening on $1,200 per ton for HR anyways.”

“Depends on demand and foreign pricing. Not sure.”

“No, too much too soon.”

“I don’t think it’ll hold, but I also didn’t think we’d get back over $1,000/ton this year.”

“If other mills follow whether officially or internally, then it will hold. HRC demand is strong and (it will hold) if oil prices continue to rise and if that demand remains strong.”

“No, I think you may see one last push from the mills to get their prices up, but with imports now significantly below that number and futures markets crashing, buyers will not be in a hurry to buy anything at that number.”

“I don’t think so. I see manufacturing softening a bit.”

Is inventory moving faster or slower than this time last year – and why?

“Same. March, April, and May were strong last year.”

“Faster as contagion built around the increases and lower inventory.”

“March was a good month for us … We anticipate second quarter to be good.”

“I would say about the same, but we also aren’t keeping a lot of inventory on hand.”

“Faster. Inventory levels are very low at the mills, SSCs, and end-users. Lead times are extended.”

“Big jobs keep production moving, but not as many individual jobs as last year.”

“Much faster, and nobody in the discrete plate distribution world has any appreciable inventory. A tremendous amount of horse trading is going on between plate distributors. Everyone caught without inventory.”

“Slower due to inventories increasing, allowing for additional supply in the market.”

“Slower, on lower but stable demand.”

“Fast because demand is better.”

“Slower than this time last year. The Russia invasion of Ukraine was in full effect last year and prices were soaring after a weak first quarter.”

With domestic prices rising, are you finding imports more attractive? Why or why not?

“Yes, but availability is more towards the end of summer at this point.”

“Availability is the biggest factor.”

“Still not ready to commit, but foreign is looking better.”

“Absolutely. Imports are being scooped up by pretty much every SSC we talk to. Again, I think it’ll get ugly in the summer.”

“Customers are engaging in more imports these days, but still for back-to-back projects only, not for stock.”

“Not attractive for many reasons: base price, lead time, quality concerns, customers not being able to use foreign plate for projects.”

“Yes, landed pricing is now 25% cheaper than domestic pricing.”

“Yes, but lead time is still long.”

“Imports are more attractive, but we are also not seeing customers want to extend very far out, as they are concerned that the domestic market plummets by the time imports arrive.”

When and at what price level do you think steel prices will peak, and why?

“It’s peaking in and around $1200/nt.”

“$1,500 because the mills can. Then I think they will drop fast.”

“$1,200. Import prices, slowing demand, scrap stabilization.”

“I think we are near the peak – demand is steady, but foreign pricing is looking more attractive.”

“I think we’re just about there. The indices will inch up a bit higher, but then we’ll see a nasty (NASTY!) fall in the summer.”

“Prices will peak in June/July. When service centers finish replenishment of inventories and imports start to arrive.”

“I think it will fall back to $1,100.”

“$1,250 due to demand is stable and supply is increasing.”

“I think prices are peaking now. You may see a bit more upward movement with the Cliffs’ increase, but expecting this is the top and once the mills get past their outages. Demand will slow as buyers try and push it down.”

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By Ethan Bernard, ethan@steelmarketupdate.com