Buyers Returning from the Holiday Ready to Place Orders

The number of steel offers at the lower end of the pricing scale has dried up even though the low end of our range on hot rolled remains at $640 per ton.  The number of sellers offering below $650 has shrunk over the past week and the mood is that prices have improved approximately $10 per ton.

One large hot rolled buyer told us, “The $640 number is gone with $650-$660 maybe. We have had to move part of our order book to Russian hot rolled in order to stay competitive.”

We heard from a galvanizing mill that they too have seen strong bookings over the past two weeks and that bookings continue to be good so far this week. They told us, “We saw pricing become firm in other areas last week as the bottom numbers in the market dried up and new competitor quotes migrated higher.”

A second conversion mill reported the market this week, “Pricing seems to have stopped falling and in some cases customers are getting off the fence and placing orders, but truly, for now, not enough orders to make up for the last few weeks of ugliness…” This mill went on to speak about the foreign imports which have been impacting their order book for a number of weeks, “The market needs a bit more confidence overall, or needs to come to grips with the likelihood that some of their import orders for fall will likely be cancelled if the dumping case comes about next week.” This mill believes there will be a flat rolled dumping suit should the domestic mills win the OCTG case when the final determination is announced late this week.

We did speak with one trading company who reported that their company had stopped placing flat rolled orders with China out of concern for a potential dumping suit. Other trading companies with whom SMU spoke this week reported that they continue to quote Chinese, Indian and Taiwanese steel and prices had not varied much from the low levels being reported a few weeks back. There are still $32.00/cwt-$33.00/cwt cold rolled offers out there from China (a little higher inland) and we heard of .012” G30 galvanized offers in the low $40’s the port (also from China and higher inland).

When asked about their position on selling steel from countries identified as potential targets of dumping suits should they be filed, one trading company told SMU, “We only have the option to keep selling steel until we are legally told to stop. Not sure what will or will not happen since there are a lot of rumors going around.”

The head of commercial for one mill told SMU earlier today, “We see the industry skipping over the summer slowdown and prices remaining tight right into October.”