NEW YORK Market
players remain mixed over where steel sheet prices will move in
the next few months, with participants continuing to cite
stability in the sector, sources said.
After a number of
price hikes through the summer, sheet tags have remained fairly
stable in the past few weeks, and many service center sources
said they are holding off buying until a clearer picture
emerges. Others said that this month will be indicative of
whether prices remain strong or fall apart in the coming
"Were in a few
critical weeks right now and people are testing the resolve of
the mills to keep prices up," one northern service center
source said. "I hope they stick, and theres certainly no
need for them to come off of the prices, but well see
An increasing number
of service center sources told AMM that they have
moved to buying on an "as needed" basis, with many resolving to
refrain from placing new orders until they have a commitment
from an end customer.
Mill lead times have
pushed out in recent weeks, particularly on coated material,
which some said could indicate strength in the sheet
"Theres a lot of
pushback from end customers who dont want to pay higher
prices, but inventory costs are going up because most of the
cheap steel people bought is going out the door," a Midwest
service center source said. "Theres a lot of people who
think well be at a bottom in November, and people are
pushing inventory out the door banking on the fact theyll
buy cheaper in November. But as lead times continue to push
out, that window for the end-of-the-year sale gets smaller and
smaller. I personally dont think well have a huge
fire sale if lead times continue to push out."
counter that while demand has remained steady, levels remain
far too low. Without a pickup in real demand, higher prices
cannot be justified, they said.
"Im betting that
by Oct. 1 prices will go down again. Theres no reason for
it to hang up there," a second Midwest service center source
Others agreed, noting
that with supply constraints resolved, particularly with the
return of Pittsburgh-based U.S. Steel Corp.s Lake Erie
Works in Nanticoke, Ontario, after an 18-week lockout, downward
pressure is increasing.
anticipating that pricing will go back down again. With U.S.
Steel settling, its causing psychological pressure. There
are some planned outages, but there will also be tons added
back into the marketplace that werent there in the last
five months," a third Midwest service center source said. "From
my own standpoint, things look to weaken again."
SteelBenchmarkers latest report, released Sept. 11,
confirmed the flat trend, with prices remaining virtually
unchanged for the second consecutive report. U.S. hot-rolled
band dipped 0.3 percent to $718 per tonne ($651 per ton) from
$720 per tonne ($653 per ton) two weeks earlier, while
cold-rolled slipped 0.1 percent to $835 per tonne ($758 per
ton) from $836 per tonne ($759 per ton) in the same
Sources along the
coastline said imports set to arrive in the fall will certainly
mean pressure on domestic tags, although several traders said
Asian prices have since increased from lower levels.
Looking ahead, low
inventory levels and longer lead times may mean service centers
wont have as much leverage as they did before the summer
to push for deals.
"I dont think
well see much of a change one way or another," a
Southwest service center source said. "Service centers are
relatively tight on their inventories, and lead times have
pushed out. They cant afford not to place some orders
now, and thats probably a good case for prices to hold
steady. I do think theyll soften closer to the end of the
year, but theyll remain rather steady."