NEW YORK The steel sheet market remained quiet this week, underpinned by stable but lackluster demand and mounting market speculation that another round of price increases could be under way.
Sheet prices have softened slightly in recent weeks, an easing that market sources describe as more of a market adjustment than an outright indication that pricing will return to year-to-date lows seen in the spring.
At the same time, talks of another price increase have spread quickly in recent days, with market sources pointing to the perfect alignment of low inventory levels and extended lead times.
"Ive heard rumors of another price increase coming out soon, but Im unsure about it right now," said one mill source. "Ive also got mixed emotions about it. Because of the inventory situation, I can see some saying the timing is OK. But such a move could also turn into a vicious cycle because its not demand driven and you open yourself back up to imports."
On the consumer side, service centers and distributors have said demand remains fairly stable and unlikely to change in the near term. They added, though, that talk of an increase could serve to stir up more uncertainty and persuade buyers to get off the fence.
"Business-wise, things are flat. You can see it as the glass being half somethingfull or empty, take your pick," said one Midwest service center source. "$32 per hundredweight is the number and I think itll become more suspect as this potential increase talk will stir up a little dust."
SteelBenchmarkers latest report, released Sept. 25, confirmed continued flatness, with prices remaining virtually unchanged for the third consecutive report. U.S. hot-rolled band dipped 0.1 percent to $717 per tonne ($650 per ton) from $718 per tonne ($651 per ton) two weeks earlier, while cold-rolled slipped 1.1 percent to $826 per tonne ($749 per ton) from $835 per tonne ($758 per ton) in the same comparison.
Other sources said that with rumors of lower deals being cut, the market looked quieter this week.
"Its kind of slowed down in the last couple of days," said one mill source. "What we have on our side is that customers need to replenish inventories, although some imports are helping address that and allowing buyers the luxury of waiting a bit. But, people have to start buying again and pretty soon.
Others said that continued stability, even in a quieter market, is a good sign.
"There is definitely some good news out there. Things have been nice and steady. Theres more activity this week and our core business has been very, very steady," said a second Midwest service center source.