NEW YORK A
weaker-than-expected outlook for the first quarter seems to be
weighing down the imported flat-rolled steel sector, with
traders and buyers reporting unchanged market conditions and
little optimism on the first day back in the new year.
Traders and buyers had said in
the final days of 2012 that they expected a pickup in import
interest in January after a substantial second-half slowdown
due to domestic oversupply and slack demand. But while some had
hoped things would change in the new year, sources said
Wednesday that initial optimism had somewhat waned.
"The incoming work right now
seems very light. Im not sure what to make of it and I
dont know when itll get better," said one buyer.
"Were just hanging around and everyone is keeping their
inventories really low."
Stronger domestic steel
production volumes could be one factor keeping buyers out of
the imported steel market. Last week, U.S. raw steel output
totaled 1.83 million net tons, according to data from the
American Iron and Steel Institute, down 0.7 percent from the
previous week but well above the fourth-quarter low of 1.68
million tons recorded in late October. That increase has kept
the domestic steel market well-supplied, traders said, causing
potential buyers to hesitate when it comes to purchases of
"There has been no business in
the last couple of weeks. No one wants to bother," said one
trader. "The problem is that the production numbers are still
high every weekwere at 1.8 million tons per week of
As a result, hot-rolled sheet
offers into the U.S. Gulf Coast have been scarce. A combination
of lackluster demand in the U.S. market and higher prices from
the Russian suspension agreement have caused sales to be
insignificant, a second trader said.
"Its been a bit quiet. No
one woke up this morning and started calling me about imports,"
the second trader said Wednesday, noting that while typical
first-quarter sales are usually stronger, that hasnt been
Other steel products, including
cold-rolled and plate, have also seen interest taper off as a
result of short domestic lead times and weak business
conditions. In addition, prices for some Asian plate products
are said to have increased by about $30 a ton, making the
product less competitive for traders whose margins are becoming
"The issue thats upon us
right now is, What are we going to do with these foreign
offers?" the first buyer said. "Nothing is really attractive,
especially with (late spring) arrivals, and why would I want to
risk buying material if everyone believes that things
(domestically) are at a standstill? Were just going to
keep buying what we need and not another extra pound."