Steel Products
Key Pricing Driver for the Month – Constraints in Supply
Written by John Packard
August 13, 2013
The main issue driving steel prices during the month of July was supply and the constraints in supply related to production issues at the North American steel producers.
U.S. Steel Lake Erie Works continued to be on lockout throughout July. The 2.5 million ton a year slab and hot rolled mill was
first locked out on April 28, 2013. U.S. Steel submitted a new offer to the union late during the month and asked the Canadian government for a forced vote which was supervised by the Ministry of Labour on July 31. The vote failed and the lockout will continue at Lake Erie Works.
AK Steel’s Middletown blast furnace was down due to a bell falling into the furnace back in June, leaving the mill operating with limited melt in widths wider than 68” and no spot availability. The accident occurred on June 22nd and the furnace was restarted on July 12th coming back to full operation the week of July 22nd.
The Ternium Shreveport, LA facility suffered a spill of molten zinc/aluminum from their Galvalume pot on July 5th. The liquid metal came in contact with electrical wiring and shut down their hot-dipped coating line. The facility was back in operation after approximately one week.
ThyssenKrupp Steel USA (Calvert, Alabama) slab source mill out of Brazil suffered a failure on one of its two blast furnaces in early May. This accident affected TK’s lead times and availability of slabs for its August order book. The blast furnace did return to operation during the month of July and TK should begin building back their slab inventories during the month of August.
Ternium Mexico suffered an explosion at their Guerrero facility in Northern Mexico. The explosion, which was located at the DRI entry point into their electric arc furnace killed 10 people and injured 4 others. The mill steelmaking facilities were out of operation for approximately one week.
Severstal Columbus suffered a spill of molten steel on July 30th which damaged one of its casters. SMU understanding is the spill was minor and the shut-down in production would only be for one week or less.
As we enter the month of August a number of the constraints to supply during July will have been resolved or on their way to resolution and could impact future pricing as the month of August progresses.
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.