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Steel sheet market stable; imports a concern

Keywords: Tags  steel sheet, hot-rolled sheet, steel imports, steel buyers, steel traders, flat-rolled steel, steel prices, AK Steel Severstal North America

NEW YORK — The U.S. steel sheet market was stable this past week as extended lead times helped mills hold the line on higher pricing, sources said, although some raised concerns over how long the stability would last, particularly with competitive and attractive imports set to arrive in the middle of the first quarter.

With just days before Thanksgiving, a traditionally sluggish period for the sector, service centers and mills are reporting stable order entries, as traders also cite a pickup in business as a result of higher pricing, razor-thin inventory levels and longer lead times.

"We’ve been pretty busy relative to it being a week before Thanksgiving," one Midwest service center source said. "The thing is that people are keeping their inventories low and we’ve been able to move our pricing up as well."

Earlier this month, AK Steel Corp., West Chester, Ohio, and Severstal North America Inc., Dearborn, Mich., raised sheet prices, solidifying a previous increase (, Nov. 7).

The recent increase wasn’t officially followed by other steelmakers, but some buyers said this past week they were told by their mill sales representatives that another increase might be around the corner.

Others doubted that this would happen, though, due to the pricing differential between domestic material and imports.

Hot-rolled sheet prices remain unchanged at $33.75 per hundredweight ($675 per ton) f.o.b. mill Midwest, with sources confirming transactions closer to $33 per cwt ($660 per ton) on larger orders at certain mills. Cold-rolled sheet remains at $39 per cwt ($780 per ton) while smaller orders were put at $39.50 to $40 per cwt ($790 to $800 per ton) f.o.b. Midwest mill.

A number of mills are said to have closed out their hot-rolled books for December, as cold-rolled lead times have been pushed into mid-January, sources said. While buyers remain hesitant over loading up on product, the result has helped mills achieve higher prices.

"Our bookings are good and our lead times are solid," one mill source said. "Lead times are mostly into January and inventories are collapsed at every step. Everyone is buying hand to mouth."

But, there’s fear about just how many boats will arrive in the New Year, with some wondering if competitive foreign material will hurt domestic pricing.

"There’s probably a little bit of inventory hedging on the foreign side," the mill source said. "We’re at the ($100-per-ton) range right now between foreign and domestic, and there’s fear that if the gap gets any wider the flood gates might open up."

Hot-rolled sheet arriving c.i.f. the Port of Houston was sold at $28 to $29.50 per cwt ($560 to $590 per ton) sources said, while cold-rolled edged higher this week to between $34 and $35 per cwt ($680 and $700 per ton) on higher offers from Chinese and Taiwanese mills.

"We’ve been very busy lately, but demand hasn’t changed at all; it’s the pricing," one trader said. "Quantities have changed dramatically, and the same people who have put most of their buys traditionally into domestics are now moving a larger percentage into foreign."

Another trader agreed, noting that business has seen a meaningful pickup for customers in a variety of end markets. However, he said the fear of large quantities arriving stateside might be overstated.

"Business has definitely been getting better and everyone is feeling pretty good about it," a second trader said. "People in the construction markets are talking about how the year is looking to end off pretty good and next year should be better. Of course we’re going to see imports, but I don’t think it’ll be a flood."

Two more importers added that business continues to look busy, particularly on coated products.

"We’re getting renewed interest and business is looking to be pretty good," a third trader said.

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