CHICAGO Hot-rolled steel
sheet prices continue to face an incremental "drift" downward
amid aggressive sales tactics and short lead times, market
sources told AMM.
"Producers are in
troublethere is no lead time. We can get steel in five to
seven days in some cases, depending on the mill," an eastern
Great Lakes service center operator said.
A southern sheet distributor
agreed, citing especially short lead times at a handful of
mini-mills. "Thats one of the main factors affecting
prices," he said. "(Plus), scrap (prices) pulled back, demand
isnt improving any and theres oversupply."
"There is no sense of urgency
driving people to make immediate purchases. I would
characterize prices as drifting downward," he added. "Its
possible they havent reached bottom yet."
Last week, buyer and mill
sources told AMM spot prices have essentially returned
to where they were before the last round of mill-announced
hikes of between $90 and $100 per tononly a small portion
of which stuck in the immediate weeks after the
announcementsputting current prices in the low $600-a-ton
amm.com, April 4).
"Everybody knew the price
announcements were bogus. There wasnt even a two- or
three-day fear-buying cycle. You usually get a week or two of
(prices) rising somewhat after a published increase," a
Chicago-area coil buyer said, noting that prices are now "lower
than (before) the last price increase."
report, released April 10, confirmed the lower pricing trend,
with hot-rolled band prices falling to $673 per tonne ($611 per
ton) this week, down 0.7 percent from $678 per tonne ($615 per
ton) two weeks ago. The SteelBenchmarker price for cold-rolled
coil was flat at $784 per ton ($712 per ton).
The slipping hot-rolled band
prices follow a disappointing first quarter in terms of sales,
the Chicago-area coil buyer said. "Stagnation is what we see
today," he said.
The Chicago buyer reported
obtaining a quote this week of $615 to $620 per ton for
delivery in May, but said if he wants up to 500 tons of steel
before month-end, he can get it for $610. "They are rolling
steel to keep the mills running," he said.
Others have reported more
discounting still. "There is no honor amongst thieves. Mills
are starting to go directly to end-users around service
centers," the Eastern Great Lakes service center operator said.
"They are cutting their own throats at well under $600. If you
have an order of substance, prime can be had at $580 and
"Service centers are praying to
sell what theyve got," he added. "They cannot even buy
their way out. Its brutal. How long can the
smoke-and-mirrors game be played?"