Steel market faces a turning point in fourth quarter
Sep 30, 2013 | 07:00 PM
As the fourth quarter gets underway, U.S. and Canadian service centers continue to buy steel products on an as-needed basis due to squeezed margins and changes on the supply side.
Competition at the service center level also has been increasingly tough, causing some to reconsider loading up on extra steel. U.S. service center operators cite slow economic growth for the uncertainty permeating the domestic steel market. Some recent price increases on hot-rolled, cold-rolled and coated coil are not going to hold, sources told AMM, and there is concern that domestic prices will drop.
Several sources pointed to oversupply, short mill lead times and erosion in scrap pricing as factors placing downward pressure on flat-rolled prices for the fourth quarter.
The latest survey by the Institute for Supply Managements Steel Buyers Forum showed forward order trends up, backlogs up slightly, improved shipments vs. the previous quarter and a 13-point jump in the percentage of respondents expecting an upturn in sales and production in their industries over the next six months.
Yet some sources told AMM that lower scrap pricing, returning capacity at AK Steel Corp., West Chester, Ohio, and Pittsburgh-based U.S. Steel Corp.s Lake Erie Works in Nanticoke, Ontario, and imports will pressure domestic hot-rolled and cold-rolled coil prices into lower realms this fall.
I dont think anyone has a lot of inventory, an East Coast flat-rolled distributor source said. Were OK busy, not great busy. Were collecting our increases, but definitely not all of it. Competition is hard.....
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