CHICAGO — Citing lackluster year-end demand and weak pricing—despite some attempts to move tags higher—most steel buyers are avoiding any speculative purchases as they wait to see what 2013 will bring.

"My inventories are higher than normal, so I am being very selective as to what I’m buying," one Chicago-area carbon sheet buyer said. "I took advantage of one small deal offered to me, but I’m not buying on spec as much as on what I must have."

The materials manager for a Great Lakes defense and mining equipment-maker agreed. "We’re buying for projects, but we’re not stocking in advance," she said. "Our volume has been a little less (this quarter), but still steady."

The latest Institute for Supply Management’s Steel Buyers’ Forum survey confirms the cautious trend. For the second month in a row, not a single surveyed member said his or her company expects to boost inventory over the next six months.

Steel buyers are also somewhat bearish on the demand side. Compared to October, more respondents said in November that incoming orders will decline in the next three months (27.3 percent in November vs. 18.2 percent in October) and more predicted declining backlogs (36.4 percent vs. 27.3 percent). Nearly half (45.5 percent) deemed their inventory levels "too high" against demand, up from 27.3 percent who claimed their stocks were too high in October.

"I was on the phone yesterday with customers, and they were doom and gloom," a sales and purchasing executive for a Chicago-area service center said.

Steel buyers’ caution comes at a time when "pricing has hit a wall," the Chicago sheet buyer said. "Unless we see an improvement in the economy, I doubt prices will move up."

Domestic hot-rolled sheet prices have stalled out at about $32.25 per cwt ($645 per ton) f.o.b. mill after two rounds of fall price hikes, although sources predict a softening may be in the cards.

"We had hoped the price increases would hold firm, but we haven’t seen it. There is so much cheap product (both domestic and import) in the market right now," the sales and purchasing executive for the Chicago-area service center said.

But there are still pockets of strength for steel distributors, sources said. A Midwest coated-sheet distributor, for example, said his firm has not experienced a slowdown.

"We are as busy as the devil. We are heavily into automotive, and housing is picking up, so volume is going to be good in 2013," he said.