CHICAGO Hot-rolled and cold-finished bar product prices both fell in May amid lower scrap surcharges, with hot-rolled taking the bigger tumble, market sources said.
"Were fairly steady, but we are down 15 percent from last year," an Ohio Valley bar distributor said. "Were hoping scrap finds a bottom soon."
"One month is good; one month is bad" in terms of orders, the distributor said. "Theres not enough consistency and little momentum."
An upper Great Lakes special bar quality (SBQ) distributor agreed. "There is flat demand and a lack of excitement in the market," he said. "It could be a tough quarter. Mills are desperately trying to hold prices firm and would like them to go higher, but demand is not supporting it."
AMMs price for hot-rolled 1000 series 1-inch rounds now stands at $42.50 per hundredweight ($850 per ton), down from $44.50 in April, while cold-finished Grade 1018 moved down just 50 cents to $62 per cwt ($1,240 per ton). Cold-finished pricing frequently lags hot-rolled tags and faces less downward pressure due to longer lead times.
Producers scrap surcharges for June look poised to fall another $20 per ton, with Steel Dynamics Inc., Fort Wayne, Ind., the latest to slate a cut (amm.com, May 14). It follows a $22-per-ton cut by Nucor Corp., Charlotte, N.C. (amm.com, May 13).
"Were dealing with a difficult business model," the Great Lakes buyer said. "Without the momentum, you cannot get the increases."
The pace of inquiries has slowed for a large cold finisher in the Midwest. "We had a bounce in the first quarter, but April and May have been status quo. ... We dont foresee an upswing in June or July. Theres no urgency out there," he told AMM.
"When demand is down, we need to control inventory. So we are watching that, just like the original equipment manufacturers are," he added.
Business is down "a little bit" this month, one East Coast bar distributor said. "Machine shops either have too much work or dont have any," he said. "Everybodys saying something different, but the phone calls and e-mails are not as frequent."
A lower Great Lakes bar processor said that both his producers and customers have reported slowing business. But "were holding our own," he said.
"Theres no real change in market conditions from last month. Demand continues to be soft," a national bar distributor in the Southeast said.
"Everything other than Tier I and II automotive has been pretty soft," a second Great Lakes bar processor said. "People are still building nonautomotive parts, but the carmakers are pulling the wagon. ... If we had another 2012, I would be astounded."