Steel Products
Final Thoughts
Written by John Packard
January 18, 2013
Three mills are out this week attempting to dump steel quickly in the marketplace at $560-$580 per ton. The lead mill is known to do this just prior to announcing a price increase. SMU is being told the mills are asking for large block tons of hot rolled in order to book at these levels. Whether or not they are getting any takers is up for discussion – I guess if we get an announcement in a day or two then the lead mill was successful in getting their mill filled.
The steel analysts have been pushing the steel mills to announce a price increase. I have seen a number of analysts from Timna Tanners to Sal Tharani making statements to their clients that a price increase should not come as a surprise.
I have spoken to a number of large steel buyers on the subject and most think that there will be an attempt to stop the erosion of prices if only for a short period of time. A price increase announcement may stop the slide and prompt some orders believed to be sitting on the sidelines. However, when I ask steel buyers if they have orders to place – even at low numbers – I generally do not get yes as an answer. There does not appear to be too many speculators in this market and, as one large OEM buyer told me, “There’s just too much capacity chasing too little demand.”
Will a price increase “stick?” – that depends on how many orders are sitting in buyers pockets and what kind of patience steel mills have before they chase tons by dropping steel prices.
A quick reminder that our Steel 101 workshop registration is open and available online – www.SteelMarketUpdate.com – or through our office (800-432-3475).
As always your business is truly appreciated.
John Packard
Read more from John PackardLatest in Steel Products
September energy market update
In this Premium analysis we examine North American oil and natural gas prices, drill rig activity, and crude oil stock levels through September. Trends in energy prices and rig counts serve as leading indicators for oil country tubular goods (OCTG) and line pipe demand.
Market says cutting interest rates will spur stalled domestic plate demand
Market sources say demand for domestic plate refuses to budge despite stagnating prices.
U.S. Steel to halt slab conversion at Granite City Works
U.S. Steel said it plans to reduce slab consumption at its Granite City Works near St. Louis, a company spokesperson said on Monday. The Pittsburgh-based steelmaker will shift the production and processing of steel slabs to its Mon Valley Works near Pittsburgh and its Gary Works near Chicago. Citing a United Steelworkers (USW) union memo, […]
SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.
HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.