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Sheet steady despite drive for higher tags

Keywords: Tags  steel, steel prices, price increase, oil country tubular goods, OCTG, trade petition, scrap, sheet hot-rolled coil


CHICAGO — Steel sheet prices held steady this past week as mills continued to drive for higher prices despite increased domestic output and lower or flat raw material costs.

AMM’s hot-rolled coil price was steady at $33.50 per hundredweight ($670 per ton), while cold-rolled coil held at $39.50 per cwt ($790 per ton).

While no price increases have been announced, market sources said mills have been shopping for prices ranging from $34 to $35 per cwt ($680 to $700 per ton) but have largely given up on the higher numbers.

Some buyers said mills were unwilling to offer hot band at less than $34 per cwt, although others indicated deals as low as $33 per cwt ($660 per ton) remained available. Prices ranging from $32 to $33.25 per cwt ($640 to $665 per ton) continued to be available to tubers buying thousands of tons.

"We increased prices a couple weeks ago and things looked to be on the mend. But this (past) week was a little soft," one mill source said, noting that his company had—without making an official announcement—informed customers that it would be seeking $35 per cwt for new orders.

But that push for $35 per cwt has fizzled, and the company is now trying to get $34 per cwt with mixed results, the mill source said. The softness might be due to increased availability from integrated mills that had struggled to maintain output earlier in the year but are now steadily catching up on back orders, he speculated.

"Everyone is back on track," the mill source said. "The usual customers are still booking. It’s just a little bit more competitive than we thought it would be."

Some consumers reported that integrated mills—after previously announcing that they would not sell below $34 per cwt—were in some cases conceding that they had been above the market earlier this summer. Several buyers reported that they had been offered lower prices by integrated mills that were perhaps looking to regain market share in the spot market.

However, buyer opinion was divided over how widely such deals might be available. The situation appeared to vary by mill and product, with other customers noting that some integrated mills with limited spot tonnage—especially on cold-rolled and coated steel—continued to demand a premium for what spot material they might have available.

Market sources generally agreed that lower prices available this past week might be not be around next week, although some were puzzled by domestic mills trying to get higher prices in a typically slow month, especially with lower or sideways costs for inputs such as scrap, iron ore and coal.

Buyers for pipe and tube mills also said they were frustrated that domestic mills were pushing to increase flat-rolled steel prices soon after a positive ruling on oil country tubular goods (OCTG) from South Korea (amm.com, July 11) but well before big inventories of the material already on the ground had been consumed.

"That inventory hasn’t purged itself from the system. And if scrap is sideways to down and capacity utilization is up, how can prices go up—especially with the pipe and tube guys bleeding money?" one tube mill buyer asked.

But some sources dismissed the notion that raw material prices and steel were correlated. "A rational person would say that. But steel pricing is all about momentum and psychology, and it’s anything but rational," one service center source said, echoing other sources in noting that mills don’t want to firmly link their pricing to raw material cost trends unless costs are trending upward.


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