NEW YORK The steel sheet market has remained firm this week as steady market activity coupled with stronger end-use markets has provided market participants some welcome optimism.
"Business is goodits been steady and improving in the past few months, so were grateful for that," a Midwest service center source said. "This past week was a little spotty because of the (Independence Day) holiday, but overall, business is pretty good."
Hot-rolled band prices held steady this week at $32 per hundredweight ($640 per ton) f.o.b. Midwest mill, while cold-rolled coil inched up to $37.50 per cwt ($750 per ton) from $37 per cwt ($740 per ton).
Sources attributed the recent strength largely to supply side disruptions, including the ongoing lockout at U.S. Steel Corp.s Lake Erie Works in Nanticoke, Ontario, and an unplanned blast furnace outage at AK Steel Corp.s Middletown, Ohio, facility.
Earlier this week, sources said that AK Steel was planning to bring its Middletown furnace back online July 18 (amm.com, July 10)earlier than some had originally expectedbut most sources said they dont expect the restart to significantly impact the sheet supply as stronger end markets may help rebalance fundamentals.
"The reality is that AK will come on a week earlier than what people planned for. I dont think it changes things, though," a second Midwest service center source said. "AK was the push that people needed to get over the hump from a pricing standpoint, but the market is still strong, automotive is strong and so is construction. The trade case will also help the pipe and tube market, and those guys are large spot buyers."
A third Midwest distributor agreed, noting that lean inventories have helped make the recent sheet hikes successful. "In my mind, what helped these last couple of price increases stick to the extent that they did is a perception ... of a shortage of tons. Inventories were lean and the mills were happy to jump on that," he said. "Business is decent. Year to date, its less good in terms of tons sold, but were still making decent margins. Demand isnt terrible."
Service center sources also are reporting that theyve received more foreign offers of sheet into the Midwest in recent weeks, an area traditionally shielded from foreign steel due to high transportation costs. Some wondered whether that was a sign of weakness in the world markets and questioned if U.S. prices would hold steady by the time foreign steel arrived stateside in the fall.
"Were cautiously optimistic right now. The best question is the September question. Will the market still support price levels in the $32.50 to $33 (per cwt) range? Well see how things go at the start of September," said a northern source. "But well have to make hay when the sun is shining. The sun hasnt been shining in the last year and a half, so this is a good time."