service centers close out the years steel purchases and
contemplate demand for the first quarter of 2014, a few say
they are building inventory ahead of both higher orders and
price increases while most others are staying the course and
keeping inventories low.
Service center steel
shipments in November saw month-on-month declines of 19.1
percent to just under 3.07 million tons in the United States
and 11.1 percent to 473,000 tons in Canada, according to the
latest data from the Metals Service Center Institute.
Part of the decline
was attributed to the Thanksgiving holiday in the United
States, but tons shipped per day still fell 7 percent to
153,400 tons month over month in the United States and 2.1
percent to 23,700 tons in Canada.
Steel inventories held
by U.S. service centers fell 1 percent month on month to 7.98
million tons (2.6 months supply at current shipping
rates) in November, while Canadian steel inventories rose 0.9
percent to 1.26 million tons (2.7 months supply) in the
"We are keeping our
inventory at a normal level. We are buying off demand (even
though) we think there will be another price increase in the
next month," a source at one Great Plains distributor told
"Were set pretty
well for January inventory. We arent purchasing much for
now," said a source at a lower Great Lakes distributor, who
added that she wondered whether the latest price increase
announcements will be widely accepted. "We are waiting to see
where things fall out."
On the sell side, "we
do have orders increasing for the first quarter, so we hope
things might ramp up," she said.
An eastern service
center operator said that he is buying all the steel he can get
under the terms of his current supply contract, believing the
same opportunity wont be available on the domestic spot
market next month.
He was one of several
distributors who told AMM they were taking advantage
of competitive low-priced foreign offers on hot-rolled,
cold-rolled and galvanized sheet, some of which will be
arriving even before year-end but additional cargoes arriving
well into April. "We just bought cold-rolled from China (at)
$31.50 per hundredweight ($630 per ton) delivered on the East
Coast. ... Thats just the tip of the iceberg," he
A pipe and tube
distributor source said he welcomed announced price increases
for January. "I dont think the prices can get lower. So
well maintain good balance of inventory to supply
customers adequately," he said.