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Stability governs SBQ demand, pricing

Keywords: Tags  special bar quality, SBQ, SBQ prices, SBQ demand, supply, inventories, automotive, energy hot-rolled steel


CHICAGO — Special bar quality (SBQ) base prices have remained unchanged over the past six weeks, buyers said.

Talks on contract terms for 2014 between buyers and their mill suppliers and manufacturing customers have also begun, they said, with stability and cautious optimism the most prevalent phrases in conversations (amm.com, Oct. 21).

The AMM price for hot-rolled Grade 1000 series 1-inch rounds came in at $817 per ton ($40.85 per hundredweight), down from $829 per ton ($41.45 per cwt) previously. Of the decline, $10 is attributed to the 50-cent drop in the raw material surcharge and $2 to lower order rates, as there has been sufficient material throughout the supply chain.

"We are cautiously optimistic. Demand has not worsened, which is why we’re no longer panicking," one western Great Lakes distributor said. "This is turning out more like 2010 than 2012. We are hoping we don’t see any degradation in prices, but you can get a supplier to drop the price a little bit."

On the customer side, "the automotive tonnage is there; everything else is not," he said.

The pace of sales remains steady, a national processor and distributor based in the Southeast said.

"No one is bulking up or taking a lot of risk with steel. I am constantly looking for where demand is improving. There is more optimism, but it is cautious. ... Some of the jobs that were quoted numerous times are starting to be awarded. We don’t see much change in pricing," he said.

"We see more of the same. Business is steady, a tad below our forecast," a Mid-Atlantic cold finisher said. "We expect more of the same next year and selling prices are unchanged."

A steel forge operator said his sales, shipments and new orders have been helped by automotive industry demand, but general industrial demand is off from last year.

September didn’t "create the bounce" that was expected after a seasonal summer lull. "We have been in an extended period of low levels of activity. We hope that this weakness won’t continue next year," a producer of cold-drawn shapes said.

"We’re cautiously optimistic. Things are stable," a cold drawer in the Monongahela Valley region said.

Despite the histrionics in Washington, he believes the market is poised for growth, with demand continuing to rise among automotive, energy and aerospace customers.

"Core accounts have held their own. Some increased their business, others are flat, but we will be ahead of sales, volume and profit forecasts."


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