Purchasing managers indicate that the steel sheet market is
inching toward recovery, with destocking reportedly on the
decline and mills efforts to raise hot-rolled sheet
prices said to be gaining some spotty traction.
"Business is decent.
May was a very good month," a source at a Mississippi
flat-rolled steel processor said. "For tons out the door,
wed have to go back to 2008 to see similar per-day
An East Coast source
agreed that the past six weeks of improved business is
encouraging. "We think the market bottomed out and prices are
heading north. Mills are not discounting like they had. That
puts distributors in buying mode instead of
sitting-on-the-fence mode," he said.
Hot-rolled coil spot
prices reportedly touched lows of around $27.50 per
hundredweight ($550 per ton) during the latest downcycle, but a
$50-per-ton increase in published prices announced in late May
has served to bring prices off the bottom, sources said. Buyer
and seller sources last week reported spot prices of around
$29.50 per cwt ($590 per ton) f.o.b. Midwest mill, with mills
said to be pushing for even more of a boost where possible (
amm.com, June 6).
Some mills are now
discussing another round of increases as well, AMM
In terms of pricing,
"the mills are trying to stand firm," the Mississippi steel
processor source said.
A Midwest steel buyer
agreed that spot prices were on the rise, noting that his
prices have moved up by $10 to $20 per ton rather that the $50
per ton initially sought, and that the "prevailing number" is
still under $600 per ton.
With prices on the
rise, some distributors as well as end users are choosing to
buy more material, the East Coast source said. Distributors
"are replenishing their own stock of standard, vanilla
material. The momentum is starting to move onto the positive
The Institute for
Supply Managements latest Steel Buyers Forum survey
confirms the trend of modest restockingor at least of
slower destocking. Fewer buyers surveyed kept less than one
months supply on hand in May (28.6 percent compared with
44.4 percent in April), and there was a significant drop in the
proportion of buyers who deemed their inventories too high
compared with demand (28.6 percent compared with 38.9 percent
A little more than one
third of respondents (35.7 percent) said they expect to reduce
inventories over the next six months compared with 50 percent
But while destocking
appears to have slowed and some in the sheet sector described
May order and shipment levels as decent or even better than
expected, market players also said some buying caution remains,
especially when buying from mills with shorter lead times.
Demand is "kind of a
crapshoot. Most people are still just filling holes. Were
waiting on quotes (offers) out for July and the third quarter.
Nobody is jumping on anything," the Midwest buyer said.
flat-rolled processor source agreed, noting that he usually
will order a weeks worth of steel rather than a
months volume. "Theres no reason to place big
orders," especially with lead times remaining short, he