NEW YORK The
steel sheet market remained steady this week amid lead times
pushing closer to the end of the year, discipline on higher
pricing and firm demand.
participants have underscored that the industry looks to be on
the cusp of fundamental change, particularly as negotiations
continue for 2014 contracts and rumors swirl of an imminent
sale of Essen, Germany-based ThyssenKrupp AGs Steel
"As far as Im
concerned, this is a nine-inning game and were just in
the second inning," one southern service center source said.
"The OEMs (original equipment manufacturers) are shocked
because their price tags have gone up $60 per ton and
theyre in denial. But look at spotits up even
higher ... things are changing quickly."
Rumors have been
circulating in the market that the sale of ThyssenKrupps
facility in Calvert, Ala., could be announced in the coming
weeks, a move that would consolidate the industry and firm up
pricing in the Southeast (
amm.com, Oct. 29).
Meanwhile, as mills
and buyers negotiate 2014 contracts, steelmakers say they will
no longer offer index-based pricing, which could effectively
change buying patterns and help mills bottom lines.
Some sources said this
could change the outlook for 2014.
"Its been a long
time since mills had any pricing power," one Midwest service
center source said. "It seems like its all falling into
place for them and demand is getting better. Im pretty
bullish moving into January."
Lead times also have
been extended, with hot-rolled moving into early December and
cold-rolled and coated material into late December. Some mills
are even reporting lead times as far out as the start of
However, imports set
to arrive in greater numbers starting in the first quarter
could change how much impact mills will have next year. With a
greater price spread between domestic and foreign pricing, and
overcapacity globally, some market participants wonder whether
things could fall apart quickly.
"The big question now
is that, given the bigger picture of global overcapacity and
the regional picture of U.S. mills raising prices, will these
mills be able to hold onto their price increases in the face of
oversupply?" a second Midwest service center source said.
"Theres pressure coming in the first quarter."
remain a top concern for service centers unable to move the
higher pricing onto their end customers. They said that
something has to fundamentally change or the pattern wont
be sustainable. "Minimal. Its been minimal," one
Southeast service center source said concerning passed
increases. "No one wants to say uncle and give up
on business. There have been very light increases passed along
to the end-user, but its really so minimal that its
not even worth mentioning."
SteelBenchmarkers latest report, released Oct. 30,
confirmed flat market conditions. U.S. hot-rolled band rose
just 0.8 percent to $729 per tonne ($661 per ton) from $723 per
tonne ($656 per ton) two weeks earlier, while cold-rolled coil
inched up 0.2 percent to $839 per tonne ($761 per ton) from
$837 per tonne ($759 per ton) in the same comparison.
But many participants
said the future looks steady.
"Demand looks good.
Its not great, but its not bad. Its just
steady," a third Midwest service center source said.