NEW YORK Steel sheet prices in the Midwest continued to soften this past week, but market participants contacted by AMM believe pricing will hold steady in the upcoming weeks.
"Weve been rather busy this week and the herd to buy seems to be moving again," one northern service center source said Sept. 20. "Theres been a little softness from the mills, but its more or less holding firm. Its been an adjustment rather than a drop."
Hot-rolled prices fell to $32 per hundredweight ($640 per ton) this past week, down from $32.50 per cwt ($650 per ton) a week earlier, although lower deals were reported from certain mills. Cold-rolled coil held steady at $37.50 per cwt ($750 per ton) as sources underscored the strength in the cold-rolled market.
While the softening was something the market had expected for the fall, the divide in recent weeks was over whether prices had the potential to drop to the $28-per-cwt ($560-per-ton) level seen in the spring.
However, with lead times more extended than they had been, multi-month low inventory levels and steady demand, the market could just be going through a mild adjustment, some said.
"I dont believe for a second that prices are going down. Theres no foreign and theres no steel availability short term," one East Coast service center source said.
U.S. service center flat-rolled inventories stood at 4.6 million tons (2.0 months supply) at the end of August, down 14.3 percent from 5.37 million tons (2.3 months supply) a year earlier, according to the latest Metals Service Center Institute data.
Concerns over additional supply with the return of Pittsburgh-based U.S. Steel Corp.s Lake Erie Works, among others, also seemed to have subsided (amm.com, Sept. 3).
"The only way the extra trickle-down effect will happen is if demand falls apart, and I dont think there are any indicators that it will," the East Coast service center source said. "No one is building inventory and there isnt a report out there that says inventories are rising. If you take those two points, theres no way prices will fall apart."
However, while pricing seems to have softened, some continued to hesitate on future direction. "The bottom line is that things are softening more than you and I know," a Midwest service center source said. "There are some mills who are willing to give you a pretty regular base price but cutting deep discounts on extras."