NEW YORK The steel sheet market remained steady this week amid increased discussions over a possible price increase and concerns over the ability to pass along higher numbers to end-users, sources said.
Rumors of a price hike last week caused nervousness among buyers, who said that increases continue to be supply-driven.
"We still have an overcapacity scenario situation in this country," a southern service center source said. "It seems like power is on the mills side right now."
This week, however, sources said it would make more sense for a price increase to occur after scrap prices settle, with many citing the likelihood for upward movement on the raw materials end, while service centers said that passing along increases would continue to be the most difficult part of the equation.
"Things are soft," a Midwest service center source said. "Were seeing a slowdown in activity and are struggling to keep coil pricing up. Theres just too much capacity out there."
Hot-rolled tags remained steady at $33 per hundredweight ($660 per ton) and cold-rolled prices were flat at $38.50 per cwt ($770 per ton).
Others agreed, saying that while mills have undergone consolidation, there are still too many service centers.
"Weve only collected a fraction of all of this increase. I could increase my price today to reflect all the announcements, but then I wouldnt sell a pound of steel," the southern service center source said.
Steelmakers have had stronger momentum to keep prices up in the latter half of the year, with a number of supply-side changes underscored by longer lead times of four to six weeks for hot-rolled and coated material out to the end of the year.
Any lingering sentiment that mills will cut end-of-year deals has subsided.
"Demand has been good and inventory levels are still down," one mill source said. "There isnt much variation from published numbers and order books look good."
"Were doing OK right nowjust fine," a second Midwest service center source said. "I would say that in the next month or two, things look good for everyone."
But rumblings among select service centers about receiving earlier shipments have made some wonder whether mills are really as full as they are said to be.
"I believe that mill pricing is truly contrived because were starting to see deliveries being early," an East Coast service center source said. "Were being quoted late December on coated products but seeing product we were expecting later come in now. I hope Im wrong about this."