CHICAGO Special bar
quality (SBQ) processors, cold drawers and distributors have
seen an uptick in orders and shipments since the fourth
quarter, although demand has softened considerably from the
first quarter of last year.
"In January, we had more revenue
than November and December combined," an Ohio Valley service
center executive said.
Published base prices
havent moved in months, and surcharges were flat as scrap
went sideways from January to February. But the surcharge is
poised to move lower next month, with one major mini-mill
notifying customers of a $13.33 per ton reduction effective
March 1 (
Spot prices for hot-rolled bar,
1000-series, 1-inch rounds have fallen to an average of $860
per ton in February, while those for cold-finished Grade 1018
rose slightly to $1,218 per ton. Buyers attributed the minute
increase in cold-finished bar to longer processing times
compared with hot-rolled lead times of three to six weeks.
Some cold finishers and
processors said their backlogs are building and they are
starting to place mill orders for second-quarter delivery.
Distribution sources were less sure of the direction.
"January was pretty strong, and
February is OK so far. Our backlog has improved, and we are on
target for first quarter. But (supply chain) forecasts are not
aggressive because we dont know if its
sustainable," one Mid-Atlantic cold drawer said.
"Business is flat. The activity
is not there yet," a Midwest SBQ distributor said. "I
dont know if customers have the work. They are buying
exactly what they need, and we are buying exactly the
A buyer in the Southeast saw
February prices decline slightly for common hot-rolled grades,
but noted having "bought a truckload today" because inventory
had been getting low.
"We are creatures of habit. We
want this year to be as busy as last year, but it has slowed
down," a lower Great Lakes processor said. "Wondering what the
government is going to do" has caused uncertainty.
There has been "very little
movement on pricing, (as) lead times are way down and there is
a lot of overstock at service centers," he said.
Customers are giving "ho-hum"
forecasts, an Ohio reseller said. "My competitors are moaning
about the same thing," the reseller said.
"People have trouble predicting
yesterday," one Midwest distributor said, expressing little
confidence about forecasting.
"We are plodding along," a
national processor and distributor told AMM. "Nothing
has changed from a pricing standpoint. Pricing is still
difficult, while certain people have high inventories and are
Buyers in the Midwest and
Southeast confirmed the practice.