NEW YORK U.S.
mills are said to be pushing for higher pricing, effectively
taking lower-priced deals off the table as buyers anticipate a
near-term sheet increase.
With the announced
sale of ThyssenKrupp AGs Calvert, Ala., facility at the
end of Novembercombined with an uptick in raw material
costs, steady demand, razor-thin inventory levels and extended
lead timesmarket speculation rose this past week that a
sheet increase is in the works.
"Things are heating
up, and Im expecting another round of increases," one
Midwest service center source said. "Im hearing it from
every (mill) rep. My suspicion is that itll happen very
remained unchanged this past week at $33.75 per hundredweight
($675 per ton), with larger tonnages reported in the $33- to
$33.50-per-cwt ($660- to $670-per-ton) range. Cold-rolled coil
was steady at $39 per cwt ($780 per ton), with some reporting
buys at $39.50 per cwt ($790 per ton).
service centers contacted by AMM said business in
November was either "good" or "steady."
While December is
typically a quieter month, marked by fewer shipping days and
more holidays, the stability looks set to carry forward into
2014, they said.
"Most of the signs I
see look like 2014 will be better," one Mid-Atlantic service
center source said. "Significantly better? Possibly. It looks
like things are getting more interesting. Plus were
looking forward to next year because we think commercial
construction will come back significantly."
One factor that could
work in U.S. steelmakers favor is the recent announcement
of the sale of ThyssenKrupps Calvert facility, which
buyers had previously speculated would help tighten the market
due to industry consolidation.
Sources said this past
week that Chicago-based ArcelorMittal USA LLC and Tokyo-based
Nippon Steel & Sumitomo Metal Corp.s move into the
market would help raise the bottom range of pricing.
"I dont think
ArcelorMittal has any intention of undercutting the domestic
business. Itll help bring the floor up a little bit," a
second Midwest service center source said. "I think well
see another increase come either end of December or beginning
of January to get us through January."
However, one hesitancy
that buyers expressed concerning a price increase is the
growing spread between domestic and foreign material, which has
hit the $5-per-cwt ($100-per-ton) range for most products. But
with most of the imports set to arrive at the end of the first
quarter, others have said that the first quarter looks
"People are really
worried about imports for March or April," a third Midwest
service center source said. "On the other hand, mills
arent capitulating. Theyre playing hardball right
now with contracts and pricing. Demand is fine. Theres a
lot of pent-up demand for (the) first quarter because so many
people are on the sidelines."
Other buyers have seen
higher offers from trading houses, a sign that world prices
could also be moving up on the back of higher U.S. tags, they
"In a rising price
environment, people are buying to beat the price increases,"
one northern service center source said. "Around the world,
foreign prices are going up too."
But buyers remain
cautious moving forward, refusing to load up on inventories
even though demand remains very stable.
were quoting a lot these days because there are shortages
of certain items out there," a fourth Midwest service center
source said. "The first two weeks of December are looking to be
pretty good. Then itll likely slow down in the second
half. Everyone is still very cautious. Demand seems to be
constant, though, and very stable."