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Demand uneven, but sheet tags hold: buyers

Keywords: Tags  steel buyers, flat-rolled steel, steel prices, steel demand, steel distributors, steel processors, Institute for Supply Management, ISM Corinna Petry


CHICAGO — Flat-rolled steel mill price increases over the past 60 days have taken hold despite uneven demand among processors and distributors, mill buyers told AMM.

One Great Lakes steel buyer is optimistic, while another said his sales are in a slump.

The latest survey conducted by the Institute for Supply Management’s Steel Buyers Forum shows a similar split.

A Mississippi Valley sheet distributor said that even though his orders are steady, "our strategy now is to wait and see (if the latest $25-per-ton) increase sticks. That is a departure; normally we bought a month’s worth of steel at once to fulfill a customer’s quarterly needs. Now we’re buying one week at a time."

A Great Lakes distributor is "upbeat about prices sticking and holding. Yet, there is no question the market is still supply driven, which leads me to question the longevity of higher pricing," which might see some erosion by October, he said.

Orders have risen in the past few months, and prices seem to be sticking, one Midwest warehouse sales executive said.

However, a second Midwest source said flat-rolled "demand slumped last month, and this month is looking kind of dismal." On the other hand, customers’ forecasts for the rest of the third quarter aren’t that bad, he said.

Deliveries have arrived ahead of officially quoted lead times, the second Midwest source said. Supply is plentiful, "so how the mills are justifying another increase, I don’t know. Warehouses should be very wary of this."

There was a big jump in the number of buyers predicting orders and backlogs would decline over the next three months (27.8 percent vs. 7.7 percent in June), but there was little change in the expectations for economic activity over the next six months, with one-third of buyers forecasting an uptick.


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