NEW YORK An early summer slowdown has hit the tool steel market, with participants reporting a noticeable drop in recent business.
"Usage is going way down real quick. Julys going to be horrible. Its softened up quite bit," one West Coast distributor said, attributing the softness to a decline in drilling activity.
The U.S. rig count fell by 12 week on week, according to the latest Baker Hughes Inc. count.
A second West Coast distributor, who said that this year has been slower than 2012particularly since Easterattributed the tepid market conditions to high gas prices and proposed tax code changes in President Obamas budget plan, which some industry groups have said could hurt manufacturing (amm.com, April 11).
"It (tool steel) is a consumer-driven business," he said. However, he added that he believes tool steel distributors serving the aerospace market are busier than ones serving other markets.
As a result of the slow market conditions, prices were largely reported as flat or down, with D2 20-inch rounds falling to $2.40 per pound from $2.50 per pound the previous month.
Most other grades held steady, with A2 flat ½-by 1-inch cold work die steel still at $4.55 per pound and H13 2-inch rounds unchanged at $3.45 per pound.