CHICAGO It might be March
Madness for college basketball but its proving to be more
a month of malaise for steel distributors, who arent
seeing much upward movement in demand or spot pricing despite
recent price hike attempts.
"There is not a real strong
pulse to the steel market," a source at an upper Great Lakes
flat-rolled distributor told AMM. "February was steady
year over year but our shipments will be down in March. That
tells me demand is tepid."
Steel shipments by U.S. members
of the Metals Service Center Institute (MSCI) averaged 168,400
tons per day last month, a scant 1.7 percent ahead of 165,600
tons in January but down 3.3 percent from 174,100 tons per day
in February last year. Steel shipments by Canadian service
centers averaged 23,200 tons per day in February, down 2.1
percent from 23,700 tons the previous month and 10.1 percent
lower than 25,800 tons per day a year earlier.
U.S. distributors shipped 3.37
million tons of steel last month, down 7.9 percent from 3.66
million tons in February last year, and Canadian service
centers shipments fell 14.5 percent to 463,100 tons from
541,500 tons in the same comparison, according to MSCI
"February for us was down 20
percent from last year. Also, on a per-day shipping basis we
were down from January," a source at a Midwest sheet
And March isnt looking any
better, some steel market sources said.
"Were not getting any
pull-aheads (in orders). Were not even getting requests
for quotes for the second quarter yet, which is surprising
since were almost there," the Great Lakes distributor
source said. "Our customers are not feeling the love that these
steel mill increases will stick, regardless of what scrap is
Domestic sheet mills late last
month announced price increases of $50 per ton ($2.50 per
hundredweight), the second sheet price hike announcement since
the start of the year (
amm.com, Feb. 27). Most mills and buyers told
AMM late last week that spot transactions were still
taking place at between $600 and $620 per ton ($30 to $31 per
cwt) f.o.b. mill (
amm.com, March 14), but the announced increases
appear to have eliminated much of the major price discounting
that was said to have been taking place in the weeks prior to
"We get an announcement, the
price goes up $10 to $15 for a week or two and then slides back
down," the Midwest distributor source said. "We were at peak at
the end of last week, settling at $620. The mills are trying to
get to $650. I dont see that happening. The reality is,
theres no reason it should stick. Lead times are very
A southern service center source
agreed that mills havent got all they wanted. "We kind of
felt the increase coming so I bought to cover myself. They took
a buck and a quarter" per hundredweight increase, or $25 per
ton, on his order for April delivery, he said, not the full $50
the mills had been targeting.
U.S. steel distributors
inventories totaled 8.51 million tons, equivalent to 2.5
months supply, at the end of February, down 2.6 percent
from 8.74 million tons (2.4 months supply) a month
earlier and down 4.6 percent from 8.92 million tons (2.4
months supply) a year ago, MSCI data show.
Canadian service centers
inventories totaled 1.77 million tons (3.8 months supply)
at the end of last month, down marginally from the previous
month but up 2.4 percent from 1.73 million tons (3.2
months supply) a year earlier.
"There is a continuing effort,
particular among the big guys, to hold inventory at 60 days.
There is always an inventory depletion plan in place," the
Great Lakes distributor source said. "With mill lead times
where they are, there is no need to stock up on steel in
anticipation of prices going up."