NEW YORK — Domestic flat-rolled steel mills continue to push for higher prices, but with lead times stagnant and year-end demand waning, mill and service center sources say the market’s upward momentum has stalled­—and could be poised to fall.

“It’s either going up or going down,” a mill source said. “(The price) never stays flat in this business anymore.”

Quotes from domestic mills were reported as high as $33 per hundredweight ($660 per ton) for hot-rolled sheet as of mid-day Wednesday, but both mill and buyer sources said actual buying levels were still in the $32- to $32.50-per-hundredweight ($640- to $650-per-ton) range, with most orders trending toward the lower end.

Though no transactions were reported to AMM below the $32-per-cwt mark this week, buyers speculated lower prices might be available for consumers willing to place large orders.

“We’re all in a lull right now,” one Midwest distributor said.

The stagnation in pricing—and speculation that prices could start to slide—comes amid minimal demand and flagging lead times (amm.com, Nov. 21).

“We’re into a little bit of a sloppy period here where mill lead times haven’t move past early January or even late December for hot-rolled,” one Northern service center source told AMM. “(As a result), people are holding off (buying) at that $33 price.”

A Southern service center source agreed. “There is a standard number people are throwing out there, but it’s the classic game of who’s going to hold out,” he said. “The mills know there’s enough inventory in the market certainly with all those buys at the low point, that the service centers and OEMs (original equipment manufacturers) that bought have room to sit back and wait.”

Across the board, sources confirmed slower demand from both service center and end-user customers in the first days of December.
“Definitely there’s been a slowing of activity,” the mill source said.

Though many mills’ lead times appear to have pushed out starting in mid-October as buyers stocked up before the first round of hikes, that trend has slowed down, with some mills’ lead times even starting to pull back in, several sources said Wednesday.
“I don’t think they’re getting the orders they want,” a second Midwest distributor told AMM.

Nonetheless, speculation persisted throughout the marketplace that at least one major flat-rolled producer is planning to lead a third round of price increase announcements, although it remained to be seen just when that would occur, particularly with December looking to be a sideways month for ferrous scrap trading in some regions (amm.com, Dec. 4).
 
“There’s just not going to be any spike in demand this time of year,” a second Southern distributor said. “The mills aren’t going to get any shot in the arm from scrap, it doesn’t look like. I think this is a bunch of smoke and mirrors. There’s nothing there to support (a price increase) except: ‘Let’s keep the momentum.’”