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Steel shipments steady, but pricing less certain

Keywords: Tags  Metals Service Center Institute, steel shipments, steel inventories, Corinna Petry

CHICAGO — Steel shipments during September are fairly even with the pace of the past 60 to 90 days, but pricing has become less certain, according to U.S. service center operators.

"Our shipments last month were on par with the last three months and are about the same through mid-September," a source at an upper Great Lakes flat-rolled distributor told AMM. "If there’s a good deal on steel I’m going to buy it, (but) prices are flat."

A cold-rolled and coated sheet distributor source predicted that the fourth quarter won’t be very strong. "I think prices will drop off. They are already showing signs of weakness in spite of tightness in cold-rolled," he said, citing Fort Wayne, Ind.-based Steel Dynamics Inc.’s inability to roll that material until November (, Sept. 13).

Customers are not able to forecast very far ahead. "They’re going hand-to-mouth and everyone is still keeping inventories pretty low and buying as they need," he said.

In the Mid-Atlantic region, "there is not a lot of steel around" due to consistently low inventories throughout the supply chain, one trader and distributor said. "There’s talk of a price increase but no one is rushing to buy." Some customers have complained about current pricing, and while "there is not a lot of cheap steel to average down, (those customers) are not stepping up to buy what it takes" to move the market in one direction or the other.

New import offers have dried up, she added. Those seeking to beat domestic second-quarter price hikes bought foreign material so "we are not seeing unsold parcels arriving. There are not a lot of futures sitting on docks unsold."

An East Coast service center operator agreed that shipment volume has not picked up in September and suggested that current pricing will be difficult to hold up based on demand. "I think prices will move south, but not by much," he said. "The phones are not ringing off the hook. What that means is we’re buying very little, only to replace stock."

Several sources pointed to oversupply, short mill lead times and erosion in scrap pricing as factors placing downward pressure on flat-rolled prices for the fourth quarter.

U.S. and Canadian service centers shipped more than 4.11 million tons of steel products in August, up 4.8 percent from 3.92 million tons the previous month, according to the latest Metals Service Center Institute data.

U.S. inventories totaled 7.94 million tons (2.2 months’ supply at current shipping rates) at the end of August, up 1.3 percent from 7.84 million tons (2.3 months’ supply) a month earlier, but Canadian inventories of 1.39 million tons (2.9 months’ supply) were down 5 percent from 1.46 million tons (3.2 months’ supply) in the same comparison.

Year-to-date steel shipments by U.S. and Canadian service centers totaled 32.06 million tons, down 3.8 percent from 33.32 million tons in the first eight months of last year.

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