CHICAGO Demand for
special bar quality (SBQ) products is lukewarm early in the new
year, with pricing flat and unlikely to change through
February, according to buyers and resellers.
"We had a horrible November and
December, worse than seasonally slow levels," a sales executive
for an Ohio Valley distributor said. "Then we saw a huge inflow
of demand since the first of the year. We have seen lots of new
orders and quoting activity. We are getting large orders on our
books for the year and smaller orders for immediate needs. We
dont know if that will be sustained, but there is pent-up
He said that even though the
consensus is negative, "I am fairly optimistic. The phone is
ringing, and sales are hitting their stride."
A source at a Great Lakes cold
finisher said that demand varies widely from one end-use sector
to another. "Depending on if you are automotive, heavy truck,
agricultural equipment, each sector is very different. Some are
crazy busy; some are off 20 to 30 percent (vs. a year ago)," he
said. "It will feel like a flat yearnot deeply south or
deeply north. Im hoping for at least 2012 (business
A second source in the region
said he had talked to a lot of customers who "are still in the
wait-and-see mode." Producers "would like to push prices up as
theyre not happy with volume and earnings. But there
isnt enough demand to do it, and they have to wait for a
true opportunity," he said.
"Scrap is flat, so pricing is
holding firm," the Ohio Valley executive said, despite
relatively short lead timessix weeks or even less for
most commonly rolled grades and sizes, buyers told
"The mill order books have been
wide open for the past three months," the Great Lakes cold
finisher source said. "There is (plenty) of availability and
quick turnaroundquicker than we have seen in the past two
years." Nonetheless, he doesnt expect a change in
pricing. "Mills are targeting the places where they can go
after tons and prioritizing their marketing," he said.
Hot-rolled 1-inch-round bar in
the 1000 series remains in a narrow range just under $880 per
ton, while cold-finished Grade 1018 bar in the same size is
still below $1,220 per ton.
"As long as people are still
cleaning up inventory (and filling in holes), I think all
prices posted for January are pretty flat and will be sideways
in February," the cold finisher source said.
Other sources agreed that SBQ
pricing was unlikely to move very far in either direction over
the next six weeks.