NEW YORK A slow start to 2013 has left some North American flat-rolled steel buyers less than certain that January will register the previously expected boost in demand.
"I feel like nothing has changed much. Theres (still) going to be a struggle between input costs and demand. Thats going to define the month of January," one Midwest service center source said.
January traditionally offers the steel sector a welcome pick-up in demand after year-end destocking, and while its too early to say whether that will be the case this year, indications for the first few days of 2013 suggest a substantial boost may not materialize this month, sources said.
"A lot of buyers are off until Monday," a second Midwest service center source said Wednesday. And while some customers have placed orders, they have not yet authorized all the shipments, he said.
Other steel buyers said they had begun negotiating some spot buys to be placed in the first or second week of January, but so far most of their customers needs have been met with existing inventories and contractual agreements.
As a result, some steel buyers said they think the recent trend of stagnating or sliding flat-rolled spot pricing is poised to continue.
"(Mills are) trying to hold the market; they dont want it to slip," the second Midwest distributor source said of his negotiations with mill sales representatives so far this year. But if prices do resume the backslide seen in early December, "the message then will be how weak the market really is."
The price of hot-rolled sheet f.o.b. Midwest mill fell at the beginning of December to an average of $32 per hundredweight ($640 per ton), down slightly from $32.25 per cwt ($645 per ton) previously, and remained there throughout the month amid minimal activity.
The slow kick-off to 2013 has left some buyers hesitant to try to forecast demand.
"We dont have a lot of information yet," a third Midwest service center source said. "Shipments were slower in December, and what will happen this month I dont even know. ... I think we wont really see whats going to happen until maybe by the end of next week, (when) youll get a feel for what shipments will really be like."