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SBQ sellers, buyers start 2014 negotiations

Keywords: Tags  steel, Special bar quality, SBQ, contract negotiations, Steel Dynamics, Richard Teets, corinna petry

CHICAGO — Special bar quality contracts for 2014 are expected to be agreed at similar price and volume levels to those seen in 2013, according to some producers, distributors, cold finishers and end users who have begun negotiations.

"We’re negotiating right now (on SBQ) prices for the first quarter of 2014," Steel Dynamics Inc.’s Richard Teets, president and chief operating officer for steel, told investment analysts during an earnings conference call. "We’re always under pressure, but we’re trying to hold the line and extend the current pricing. We’ll see where it all falls out, but our position is that things are still good and we’d like to see it (bar pricing) extend where it’s at."

Some bar customers are slower than usual to commit, however, a source at a national distributor based in the Southeast told AMM. "In the bar business, some (customers) are asking what will happen with the additional (production) capacity," he said, so the inking of supply deals "is not going as well as we’d like. It’s not locking down as it has traditionally. Customers are pushing it further down the road. It’s going to remain competitive."

A forging executive said his company has not started supply contract talks yet. "If there is a price increase (expected), they like to talk early. If not, they’ll get to you by Christmas," he said.

"We are starting to work with original equipment manufacturing customers to put together blanket orders," a source at a producer of cold-drawn shapes said. "We are having a late start (to talks), but we should have (contracts in) by late October and early November."

The quantities for 2014 contracts are expected to be similar to this year, he said. "Our two largest customers told us not to plan for any growth (but) we hope they are wrong (and need more material)."

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