As optimism ramps up, buyers clamor for steel

Dec 06, 2010 | 01:08 PM |

In a mere two weeks, flat-rolled steel buyers have stopped sitting on their hands and are actively ordering more material in order to stock up for what they perceive will be a strong first quarter. Half a dozen buyers told AMM Monday that the latest announced price increases will stick and they anticipate still higher pricing in the first three months of 2011 and perhaps beyond that.

Sources' attitudes align with that of the Institute for Supply Management's Steel Buyers Forum. More than 45 percent of steel buyers surveyed in November forecast the trend of general economic activity would move up over the next six months, more than double the 21.4 percent who said this in October, while 18.2 percent projected a downward trend, substantially fewer than the 28.6 percent who were negative in October.

A little more than 18 percent of the buyers plan to increase their inventories over the next three months compared with zero in October, and only 27.3 percent said they plan to cut inventories over the next half year compared with 50 percent a month earlier.....