NEW YORK U.S.
sheet market participants continue to report stable buying
activity this week, but some are wary about the onset of the
traditional summer slowdown.
"Things have gotten
quiet, and Im starting to see the beginning of the summer
doldrums," an East Coast service center source said. "I
dont think there are long-term projects out there and
were not seeing a flurry of quotes. With the summer
coming along, I think the mills will have a fight on their
The first quarter is
usually strong for steel mills as buyers come in to replenish
inventories, followed by a slower summer period. However, this
year the first-quarter uptick never really materialized,
sources said, leading some to wonder whether the summer might
also buck the traditional trend.
"My feeling is that
this July wont be as slow as it was last year. Weve
picked up a few accounts, so well be a little ahead of
last year," a Midwest service center source said.
But while the market
is divided on what the summer might bring, most participants
report that current demand levels remain fairly
stablethough nothing to write home about.
"On days like this,
were not going to be throwing big parties, but were
certainly not too upset. Things are steady, and only slightly
better than where they were back in the first quarter," the
Midwest source said. "Things are trying to get
betterthats how I would describe it."
A northern service center source agreed that things were stable
or even modestly improving, although he conceded that its
hard to tell whats behind the activity. "Were
dealing with thousands of customers, so for us it can be fairly
blurred whether it was inventory replenishment or actual
demand," he said. "But were seeing kind of an uptick in
activity and larger orders booked by customers. Overall,
its been positive."
Possibly driving that
stable sheet demand is a recent round of price increases. Most
mills have been successful in holding onto a large part of an
announced $50-per-ton price hike led by Pittsburgh-based U.S.
Steel Corp., a move quickly followed by other mills (
amm.com, May 23), and that upward momentum may
have brought some buyers in off the sidelines (
amm.com, June 11)..
SteelBenchmarkers latest report, released June 12,
confirmed the higher pricing, with U.S. hot-rolled band rising
2.4 percent to $652 per tonne ($592 per ton) from $637 per
tonne ($578 per ton) two weeks earlier, while cold-rolled coil
was up 2.1 percent to $765 per tonne ($694 per ton).
continue to circulate about another price hike in the coming
weeks that would solidify the previous one.
"There are strong
rumors that another hike is coming, and because people ran
their inventory levels down too low, people are going to
continue to replenish," the northern service source said.
Others, though, argued
that foreign imports on certain products may pick up in the
summer months due to an increased domestic-import pricing
amm.com, June 12), which may ultimately lead to
lower domestic tags in the medium term.