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Steel sheet prices cool as weather warms up

Keywords: Tags  steel, steel prices, hot-rolled, cold-rolled, plate, imports, China, Great Lakes U.S. Steel

CHICAGO — Steel sheet prices’ climb has stalled and reversed course slightly as some mills in the Great Lakes region return to normal production levels heading into the seasonally slower summer months, market sources said.

AMM’s hot-rolled coil price assessment slipped to $34.25 per hundredweight ($685 per ton) from $34.50 per cwt ($690 per ton) previously, while cold-rolled tags held steady at $40.50 per cwt ($810 per ton) after slipping 25 cents per cwt ($5 per ton) earlier in the month (, May 16).

The dip comes as market sources reported some mills offering $33.50 per cwt ($670 per ton) for larger orders as they looked to fill holes in production schedules. Smaller buys were still reported as high as $35 per cwt ($700 per ton), although that number appeared to be increasingly unrepresentative of the market.

While lead times and demand were reported to be healthy, they weren’t enough to justify further increases—rumored to have been in the works earlier this month—especially with more supply available, market sources said. While few worried about prices collapsing, many expressed concern that tags could be in for a slow slide into the seasonally slower summer months.

On the supply side, Pittsburgh-based U.S. Steel Corp.’s Gary (Ind.) Works has resumed normal production and the company’s Great Lakes Works in Ecorse, Mich., is operating again, a company spokeswoman told AMM. Sault Ste. Marie, Ontario-based Essar Steel Algoma Inc. also has resumed normal production (, May 22). The two companies—as well as many of their competitors—were hit by production or supply chain disruptions earlier in the year (, April 16).

An increasing spread between prices in the rest of the world also is keeping a lid on domestic hot-rolled tags, market sources said. "Mills are entitled to be profitable, but it’s not real and it won’t last if it gets too far out of whack. And North America has been finessing a higher price than other industrialized parts of the world, which has some people concerned," one Midwest service center source said.

But the truly "out-of-whack" prices might be cold-rolled from China, several market sources said. Cold-rolled imports from China have surged as prices continued to nosedive, market sources said, with some worrying that Chinese cold-rolled prices were getting unusually close to hot-rolled offerings from Russia.

"Everyone and their neighbor is buying Chinese because they feel like they can’t compete without it," one trader said. "But at these prices, it’s inviting a dumping case."

But not all market sources are convinced a summer swoon in domestic steel prices will happen, especially given expected improved demand from the long-troubled nonresidential construction sector. Higher tariff margins that would favor domestic producers of oil country tubular goods (OCTG) could be another game-changer (, May 20), market sources said, by boosting near-term price sentiment and long-term demand for flat-rolled steel.

Domestic plate prices, meanwhile, held steady, with market sources reporting extended lead times and solid demand from end markets such as tank cars and pressure vessels. Prices in the Midwest were reported to be higher than those in the Gulf Coast in part because of import competition. But import discounts were said to be at the usual margin necessary to justify the increased risk and longer lead times associated with ordering offshore material, they said.

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