service center operators cite slow economic growth for the
uncertainty permeating the domestic steel market. Most recent
price increases on hot-rolled, cold-rolled and coated coil have
held, but the stickiness may be tenuous, sources told
Steel shipments by
U.S. and Canadian service centers increased last month,
although daily volume weakened compared with June, and
inventories remained lean, especially in the United States.
"Its just so
much uncertainty," a source at a Missouri River Valley sheet
distributor said. "Mills are pushing (the increases) but the
market is not quite as strong as they would like."
Due to competition,
service centers arent passing price hikes along to their
customers "at the same speed" as theyre implemented by
producers, he added.
"August volume is
better than Julys but margins are under huge pressure," a
southeastern full-line distributor owner told AMM. "We
have paid up on the flat-rolled increases, but not all of them.
Nor do we believe they will all stick and, if so, not for long.
Businessat least in our areais not good enough to
A university expansion
project created local steel demand, "but thats petered
out and the commercial market is spotty," he said. "Whats
distressing is that the competition for these jobs is so
intense. Steel margins are squeezed."
A Great Lakes coated
coil buyer agreed with the others assessments. "The price
increases have somewhat stuck. It has helped people to get off
the fence and buy a little," he said. "But Im not
optimistic about it (improved volumes) continuing on more than
a month-to-month basis. They are not buying long."
Spot quotes and lead
times on coated sheet vary widely, he said. "There is a lot of
uncertainty but its good that steel users are not sitting
on the sidelines anymore."
U.S. and Canadian
service centers shipped more than 3.92 million tons of steel
products last month, up 3.2 percent from 3.8 million tons in
June, according to Metals Service Center Institute data, but
July had two additional shipping days than the previous month
and average daily shipments fell 5.9 percent to 157,500 tons in
the United States and 7.9 percent to 20,900 tons in Canada.
"Summer is never a
boom time," the Missouri Valley distributor source said. "After
Labor Day, we hope the picture will be clearer." Among steel
distributors and their customers, "everyone is running lean.
The new normal is definitely lower inventory," he added.
source said he shed an additional 3 percent of inventory last
U.S. service centers
held about 2.3 months supply in July, while Canadian
distributors held 3.2 months supply.