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Low-ball sheet offers now off the table: sources

Keywords: Tags  steel sheet, steel prices, Midwest market, U.S. Steel, steel buyers, price hikes, hot-rolled sheet, steel prices Catherine Ngai


NEW YORK — Steel sheet price offers below the symbolic $600-per-ton ($30-per-hundredweight) mark appear to have dried up following the latest round of domestic price hike attempts, market sources told AMM.

The recently announced $50-per-ton increases haven’t translated into actual transaction price hikes in that amount, mill and buyer sources agreed, but it has served to eliminate many of the barrel-scraping discounts available in the days leading up to the move.

"From what I know, all the major deals are off the table," one Midwest service center source said. "Whatever deals there were—major ones, minor ones—everything is gone. The mills have been pretty disciplined."

Early last week, most steel buyers said that hot-rolled sheet could be purchased for as low as $590 per ton ($29.50 per cwt), although most spot deals were concluded closer to $610 to $620 per ton ($30.50 to $31 per cwt). This week, however, most market participants said the price is firmly at the $620 number, with some smaller orders transacted as high as $630 per ton ($31.50 per cwt) and all sub-$600 quotes now off the table.

The slightly higher prices come a week after U.S. Steel Corp., Pittsburgh, led a second round of hikes for the year, increasing base prices by $50 per ton effective immediately, a move that was quickly followed by most peer mills ( amm.com, Feb. 27).

At the same time, an expected seasonal uptick in steel demand this month and higher ferrous scrap costs appear to be lending some minor support to the increases.

And while few new transactions had been reported, as many steel buyers have been sitting on the sidelines ( amm.com, March 4), sources confirmed that the recent hikes did serve to successfully stop the slide.

"There’s been more activity anecdotally. I’ve had more phone activity, more incoming phone calls and people asking for larger order sizes," a service center source in the North said. "I think it’s partly because people are anticipating prices sticking because we bottomed out."

February had been a weaker month due to fewer shipping dates and "malaise" among the customer base, he said, but added that the outlook appeared promising.

"There’s a lot of cynicism out there on whether prices are going to go up," he said. "But, we’re heading into a season where seasonality of the construction products will kick in and pump the market."

A mill source confirmed that most suppliers are maintaining discipline in terms of quoting the increase, although increased buying remained to be seen.

"We’ve raised our numbers definitely. It’s not that many have booked at those numbers yet, as people are sitting on their hands. But the numbers being quoted are definitely trending up," the mill source said, adding that many mills have refused to cut lower deals.

In the Midwest, where sources say the hikes might have the most success due to a lack of competition from imports, business continues at stable, although somewhat lackluster, levels.

"Business is still spotty, but at least it’s keeping us in business," a second Midwest service center source said. "The mills are trying hard to keep those prices up. But there are some mills that if they quote you, and you don’t give them an order, they’ll get back to you."

In the Northeast, participants point out that some unsold foreign cold-rolled remains at the docks priced at a discount to domestic material. While traders confirmed that some Chinese material remains uncompetitive for current bookings ( amm.com, March 5), certain mills are said to have lowered their prices to match the foreign product.

"There’s a small pricing war going on out there between the domestics and the importers," a Northeast service center source said. "We’re going through a weird time because no one seems that busy. Our customer base is quiet, and I just don’t see the train out of the station."

Meanwhile, to keep prices up, sources said something fundamentally would need to change.

"Business is fine. We’ve been getting more inquiries. While I wouldn’t say business is great, it’s between ‘good’ to ‘very good,’ " a third Midwest service center source said. "I think everyone believes the prices are going up. The problem, though, is that there’s just too much steel in the market."


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