NEW YORK While market sources say the most recent round of flat-rolled steel price increases might have some legs, spot buyers reported limited transactions in the first half of this week, noting that they have enough inventory to meet demand.
Both steel buyers and sellers said they see a lot of support for the recent price increases.
"Scheduled and unscheduled maintenance issues, and the sharp move in scrap, have all motivated steel buyers to believe that this upcycle has some wind behind it," one mill source said.
Average industry lead times have pushed out to about four weeks vs. three to four weeks previously thanks to high levels of ordering prior to the recent price increase announcements.
"Weve got a strong November and December," a second mill source said.
Plus, November steel production levels have ticked up from recent lows, rising 2.3 percent during the week ended Nov. 10 (amm.com, Nov. 13), according to American Iron and Steel Institute data. That was on top of a 1.7-percent gain the previous week (amm.com, Nov. 6) as output rebounded slightly from a 22-month low.
Both service center and manufacturing spot buyers said they believed that some, if not all, of the second round of increases will hold.
With order books filling up halfway through December or later, mills have been holding the line on offer levels. Quotes for hot-rolled sheet have been reported as high as $33.50 per hundredweight ($670 per ton), representing the full $50-per-ton increase announced last week (amm.com, Nov. 7), although no transactions were reported near that level as of Wednesday.
The second mill source put average prices at $32 to $33 per cwt ($640 to $660) f.o.b. mill for hot-rolled sheet.
"The quotes are up, but (theyre) not selling anything," one Midwest service center source told AMM on Wednesday.
Still, many sources said they dont foresee a need to book steel in the coming days, given current demand levels.
"Our order book is pretty strong, (but) not where its actually going to be where (we) need to order a lot of steel," one East Coast manufacturer said.
"The customers were talking to are worried, (so) theyre less likely to stock," a second Midwest service center source said.
Business is strong, considering the expectation of a seasonal slowdown heading into Thanksgiving and again into Christmas and the New Year, he said, adding that customers have cited continued concern over tax uncertainties and the "fiscal cliff."
AMMs average hot-rolled sheet price as of last Friday stood at $31.50 per hundredweight ($630 per ton) f.o.b. Midwest mill, with cold-rolled sheet at $36.50 per cwt ($730 per ton).
SteelBenchmarkers Nov. 12 report, published Wednesday, put U.S. hot-rolled band at $680 per tonne ($617 per net ton), up 4.3 percent from $652 per tonne ($591 per ton) two weeks earlier.