finishers, processors and distributors describe demand for
special bar quality products as "quiet," "oscillating" and
Prices for five
products tracked by AMM slipped between 0.8 and 1.9
percent this month, with 1000-series 1-inch-thick, hot-rolled
bar taking the biggest hit, falling to $41.55 per hundredweight
from $42.35 in June.
Prices are expected to
rise $30 per ton ($1.50 per cwt) in August, however, as at
least one producer notified customers last week of a scrap
surcharge increase (
amm.com, July 11).
"There is no movement
in base pricing. I dont think youre going to see
any concessions there," said a source at an Ohio Valley bar
processor, echoing peers who said that producers remain
resolute, a position that may have been secured by brief and
scattered seasonal maintenance outages. "Demand stank in June
but is looking better for July. We oscillate monthly, good and
bad, good and bad," he said.
"Some mills are booked
out further than others, but orders are relatively soft. Mills
are being flexible but not desperate," said an executive at a
cold reducing mill. "Thank goodness the mills are being
disciplined; I dont think anyone wants to see prices
erode. Even if a mill came in and offered a block of tons right
now at a below-market price, we wouldnt take it because
that just indicates by the time that metal arrives there would
be a better deal on the table."
As for inventories in
the supply chain, customers are sitting on their hands. "There
is not a lot of inventory downstream, but theres still
too much at the distribution level," a service center
purchasing manager said. "Were trying to reduce ours
further by not replacing some of the material we sell."
If there is any good
news, its that end-users do not have excess supply. "None
have gone long or (are) flush with inventory," a Southeast
service center sales executive told AMM.
Others agreed that
excess material is not the problem. "Customers are not building
stocks, but just buying for orders in hand," a Midwest
distributor source said.
July is "soft," with
orders falling "quite significantly," the Southeast executive
said. "Its hard to understand where pricing is. I cannot
believe all our competitors buy better than we do. They are
selling product below the replacement cost.
"The root cause," he
added, "is demand is just not there. We are at the door of
every customer trying to scare up orders."
A Great Lakes
distributor source said he also was "working hard through the
dog days of summer and hoping for a stronger second half."