After strong 2011 distributors face challenging SBQ market

Sep 30, 2012 | 07:00 PM | AMM staff

Tags  SBQ, special bar quality, SBQ demand, Center Piece, AMM Staff

An overall downward trend in demand for specialty bar products has greatly changed the mood of steel distributors when it comes to inventory control and expectations of mill price changes. Players in the special bar quality (SBQ) market also are keeping their eyes on imported products, and many are divided over what impact imports have had on the domestic market.

Although domestic SBQ demand was remarkably strong in 2011 and pushed mill lead times and prices up dramatically, it has slowly melted away this year, with most cold finishers and end-users saying they hope the midyear point marked the bottom of the market.

Announced price increases for SBQ products appeared to have stuck in large part in September, although buyer sources questioned how long prices will hold up in the second half of the year, given increased supply and lackluster demand.

“Demand moving into year-end looks weak. And customers think scrap will go down so they’ll wait for the price to go down, especially if they don’t need material now,” said one bar distributor, who cited lead times of six to eight weeks.....