NEW YORK A number of major U.S. steel mills are said to be hungry for business, causing some to express concern over the future direction of prices.
"Im just sitting here and Ive had a couple of mills call me asking for business," one Northeast service center source said. "I have decent inventory at good numbers and I honestly dont want the numbers to drop. A lot of people are in the same position. But Im really unsure."
Market participants said it was unclear whether demand had changed or mills and buyers were returning to normal conditions after a cold front swept the Midwest last week, which caused a shortage of rail cars and trucks.
Some indicated that a number of major mills are still quoting hot-rolled lead times for the end of the month, in sharp contrast to lead times that moved as far out as four to five weeks in the fourth quarter.
"Were being watchful, but it seems like theres a lot of weakness out there," one Midwest service center source said. "Mills are offering hot-rolled for the end of Januarysome even earlierand thats whats got us worried."
Others cited more vulnerability to the spot market as a result of certain mills losing a sizeable portion of 2014 contract volumes because of their stance against index-minus discounts. As a result, order books have looked thinner, mill representatives reportedly have told customers. Still others underscore that the uncertainty could be short-lived, particularly as general economic indicators look stable.
"Theres uncertainty in the market on which direction (pricing is) taking," said one trader. "I think some of the slowdowns were because of the weather. In terms of business in general, I dont think there are indications that things are going to fall apart. Still, people are worried."