NEW YORK A slowdown in
business activity has sparked uncertainty over where
flat-rolled prices will land when ordering resumes at the start
of January, market players have told AMM.
Domestic mills have attempted to
retrieve deals at prices as high as $34 per hundredweight ($680
per ton) for hot-rolled sheet in the past week, but amid
limited transactions those levels were a long shot, steel
buyers told AMM.
"Youve got the
its-that-time-of-year factored into it. People are in
holiday mode," one Midwest service center source said of the
Concerns over variability in
pricing have left many spot buyers saying they will wait until
the new year to book the flat-rolled material they are
"Im at the cliff and
looking over it. Im just going to wait until January,"
one distributor in the North said.
That hesitation was reported by
many steel buyers. Amid the slowness, lead times have remained
contracted, which sources also noted last week
(amm.com, Dec. 12).
"We were about to place an order
on something we needed in the beginning of February. We thought
we better do it now, just to be safe," a second Midwest
distributor said. "They called back and asked if we could live
with January delivery."
That slowness has left many
sources noting the potential for price deterioration, with
rumors of large orders being placed below an average price of
$32 per cwt ($640 per ton) f.o.b. Midwest mill.
"It seems kind of obvious
theres weakness in the marketplace, at least
temporarily," the first Midwest service center source said.
While some mills were said to be
holding the line on offers at $33.50 to $34 per cwt ($670 to
$680 per ton), others were reportedly more flexible and willing
to offer hot-rolled material as low as $31.50 per cwt ($630 per
"Theres no way they would
get it," a third Midwest distributor said of a $34-per-cwt
quote he received for hot-rolled material.
Given the market variability and
limited buying this past week, the average price of hot-rolled
sheet remained $32 per cwt.
While service centers said they
anticipate a pickup in order levels at the start of 2013, they
fear prices will face downward pressure from ferrous scrap in
January and lower-priced imports.
"The price of scrap doesnt
seem to be moving up, capacity utilization remains
lowtheres nothing to substantiate why pricing would
rise rapidly," the distributor in the North said. "(Another)
concern is April imports have been offered at lower levels. I
know full well (thats) on the horizon, and its
getting closer and closer."
Still, there is potential for a
sudden protraction in lead times if service centers see a big
pickup in January shipment levels amid low inventories. That
could force mill prices up rapidly if spot buyers all return to
replenish at the same time, other sources said.
"There still could be a bump (in
prices) since people dont have a lot of inventory," the
third Midwest distributor said.