US steel prices to slip on oversupply: Tanners
Oct 11, 2012 | 10:54 AM
| Michael Cowden
ROSEMONT, Ill. U.S. hot-rolled coil prices could fall to as low as roughly $500 per ton in the next few years due to sliding raw material costs and global oversupply, according to Bank of America Merrill Lynch analyst Timna Tanners.
But Tanners also noted that steel market "mini-cycles" can be as short as three months and that the current one might be near a bottom.
"The story is ... were drifting in steel land," Tanners told attendees at Steel Market Updates third annual Steel Summit conference in Rosemont, Ill. "What gets (mini-cycles) going is when the mills announce a price hike, and what gets the market going down again is when raw materials go down."
Tannerswhose presentation was titled "Up Steel Creek Without a Paddle: Treading Water Amid Oversupply"forecast a hot-rolled steel coil price of about $600 per ton for 2013, but said that average price will decline to below $550 per ton in the coming years. Steel tags in the mid-$500-per-ton range are already in the market at the lower end, she said, adding that the steel sector has become characterized by "a lot of discounting."....
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