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Steel distributors wary despite shipment rise

Keywords: Tags  Metals Service Center Institute, steel shipments, steel inventories, flat-rolled market, supply, demand, pricing, competition steel


CHICAGO — North American steel shipments rose in January, but steel distributors’ expectations for the first quarter remain tempered due to a sluggish economy and an anemic pricing recovery.

U.S. and Canadian distributors’ steel shipments jumped a combined 45.2 percent in January vs. a very weak December while inventories rose 1.2 percent month on month, according to the Metals Service Center Institute (MSCI).

On a per-day basis, Canadian steel shipments rose 40.2 percent and U.S. shipments rose 30.8 percent.

"Business continues to be the same, with a little uptick in February shipments. ... But I would characterize (the steel market) as running sluggishly. Pricing continues to be muted. Lead times are short for flat-rolled (steel). Mills tried to raise the price, unsuccessfully," the vice president of a national full-line steel service center chain said.

"We are still seeing some sluggishness," a lower Great Lakes executive told AMM. "It is not as robust as we thought it would be. We don’t see much movement in February. It’s pretty lackadaisical. The new orders, the phone ringing—it’s just not happening."

Hot-rolled coil prices have gone nowhere, he agreed. "The pricing has not caught any upside," he said. "(Steelmakers) tried to get in different increases. It stopped any slide, but people are not paying a lot more for steel."

New demand has been lacking, a large-volume steel plate distributor and processor told AMM. "We don’t see anything happening soon where it will turn around. And SSAB is raising plate prices $30 per ton, with (plate) mills operating at 70-percent capacity? It’s funny they feel that they can pass that (increase) on. Maybe it’s a strategy to prevent prices from going lower," she said.

Every time published prices are posted, "the number keeps falling a little bit," she added. "Customers are not keeping inventory. They are shopping by the truckload when they need it. When there is an inquiry, they send it out to us and to six others, so it’s dog-eat-dog. And we are pressuring the mills (to keep tags flat)."

Service centers have seen orders coming from the automotive, agricultural equipment and rail markets, they said, but noted that the construction market is still moving slowly, as are small and midsized manufacturers.

U.S. service centers’ steel shipments rose 43.9 percent to 3.64 million tons last month from 2.53 million tons in December, while Canadian shipments gained 54.3 percent to 522,300 tons from 338,600 tons. U.S. inventories of 8.74 million tons in January, or 2.4 months on hand, rose 2.2 percent from 8.55 million tons in December, or 3.4 months’ supply. Canadian inventories fell 3.2 percent to 1.77 million tons from 1.83 million tons in the same comparison.


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