Steel market chatter this week

Rather than summarizing the comments we received, we are sharing some of them in each buyer’s own words.

Steel prices are inflecting down. Do you agree? How do you expect prices to trend over the next three months, and why?

“Prices will move down over the next several months. Demand seems steady, inventories are unclear.”

“Yes. Down 10% is expectation from all mills that we do business with.”

“Yes. Should be heading lower at least for the next two months. A lot can happen before that third month.”

“Yes. $900 HRC sounds reasonable for April.”

“I agree. Decline will continue for three more months, then a slight uptick at the end of Q2.”

“Yes, I agree. Expect prices to drift lower through at least March. If they drop slow and steady, that could extend into April.”

“Yes, and they will continue to inflect down since there is nothing happening in the market to change that.”

“I agree, and feel we will see prices continue to move lower into the second quarter. Barring anything unforeseen from happening, I feel a steady move to the low $800s for HRC.”

“Absolutely. We are anticipating a down market for the foreseeable future. If recent history is any indication, we’ll see an overcorrection over the next few quarters, to the downside.”

“Yes, I expect pricing to stabilize because every indication shows a slowing market.”

“Remain steady on plate.”

Is demand improving, declining or stable, and why?

“Demand is stable, contract buying better year over year, led by automotive. But spot buying is minimal as prices fall.”

“Declining in many market segments.”

“Improving – people are looking for deals.”

“Declining due to high interest rates hurting projects.”

“Stable for the season.”

“Demand never really changed much.”

“Declining in construction due to weather, otherwise stable.”

“Demand is not improving but stable”

“Demand for discrete plate is stable to slow due to seasonality.”

Are imports more attractive vs. domestic material? Why or why not?

“Imports are priced OK. Lead time is risk as usual. Logistics/freight are some issues of concern.”

“Less attractive. Same prices as futures and not much lower than some domestic offerings with much longer lead times.”

“Imports are always less expensive.”

“We only deal with domestic due to customer requirements.”

“Yes on cost, but no on lead time as our markets soften.”

“No, takes too long to receive in a down market – too much of a crapshoot.”

“Yes, still large gap between domestic and offshore over next couple of months but will narrow by April.”

“Imports are definitely attractive price-wise; it is all just a matter of lead times.”

“Yes, seeing very cheap imports to Port of Houston.”

“Imports are attractive on a price front, but extended lead times and comparing to the futures market makes them unappealing.”

What’s something that’s going on in the market that nobody is talking about? 

“China stock market is softening and hard to know the strength of their economy.”

“Long-term effect if interest rates do not drop for residential.”

“Lower input prices.”

“The number of production issues at so many mills is quite surprising.”

“Potential impact of delayed or cancelled large steel intensive projects: wind, chip, etc.”

“Trump election in US with 10% tariffs a possibility on all goods imported into US. What would be the total impact on the steel industry?”

“I am very confused on AHMSA – just last week I heard one Mexican mill rep tell us they were officially closed moving forward, and then another US rep commented that AHMSA should be going to market very aggressively in H1. No clue what is the truth.”

“Raw material prices being higher than previous years as we see prices falling.”

Care to share your thoughts as well? Contact david@steelmarketupdate.com to be included in our questionnaires.