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
"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
"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."
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.