LONDON Consumers reactions to recent price increases on special bar quality (SBQ) products have caused mixed, with some wondering how lackluster demand and low utilization rates will support higher pricing, sources said.
Charlotte, N.C.-based Nucor Corp. in February increased base prices by $30 per ton ($1.50 per hundredweight) on its carbon and alloy SBQ rolled bar products effective with March 10 shipments (amm.com, Feb. 10), a move followed by Canton, Ohio-based Timken Co. (amm.com, Feb. 20).
But while some buyers reported higher transaction prices, others doubted the longevity of the price increase.
"From our perspective, we dont see this announced increase having any real effect on the market price. The last data I saw indicated that SBQ mills are operating in the low- to mid-70-percent capacity utilization range, and those sort of numbers dont support any kind of market strength that warrants a base increase," one buyer said.
A second buyer indicated that while he generally supports price increases, the timing of the move was poor.
"I agree that real market demandalthough improvingoverall remains weak, and this action will do nothing to bring customers into the market and only temporarily improves mill shipment to distributors for the first week of March," he said.
Automotive remains a big end market for the industry, while other sectors look less rosy, market participants said.
"The automotive sector appears to be a driver, but I still question this price increase based on perceived capacity in the industry," a third buyer said. "The construction-related product demand is still somewhat soft."