2014 Outlook: Flat-Rolled Steel

Dec 31, 2013 | 07:00 PM | Catherine Ngai

Tags  Steel market, flat-rolled, outlook, producers, demand, CRU-minus contracts, U.S. Steel Corp., Severstal North America Inc. Nippon Steel & Sumitomo Metal Corp.

Steel market participants are expecting stability for much of 2014, particularly as demand looks set to grow at healthy levels and steelmakers expect to carry forward pricing momentum that began in the second half of 2013.

With U.S. steel producers pledging to move away from index-based discounting, a cautious but steady pickup in demand, razor-thin inventory levels and a change in the supply landscape due to a major acquisition, steel mill and distributor sources expect 2014 to be a positive year.

“Most of the signs I see look like 2014 will be better, and possibly significantly better,” one Mid-Atlantic service center source said. “We think commercial construction, which is a large chunk of our business, will come back significantly. We’ve had to make do without it or at very low levels for the past few years.”

Much of 2013 focused on U.S. steel mills moving away from contract discounting, also known as “CRU-minus” deals, a practice that mills claimed eroded sales margins. Mills are said to be sticking to their guns, with the majority refusing to offer index-based discounts, which means much of the 2014 flat-rolled landscape is expected to change.....

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