Markets Continue to Tighten as We Play Wait and See

Written by John Packard

Steel buyers were pulling out their hair earlier today due to the number of mills holding tons off the market as they try to determine what the new pricing should be on hot rolled, cold rolled, galvanized and Galvalume products.

As of early this afternoon (Thursday) steel buyers were informing Steel Market Update of a number of domestic steel mills whose order books are closed. We heard AK Steel has little to no spot available, Steel Dynamics order book has not yet opened for the month of May, CSN did not have pricing available and was holding back on bookings. Ternium was protecting their normal customers but reported their lead times as being a week to two longer than normal.

From the West Coast we learned California Steel (CSI) had opened and closed the month of June after only a few booking days. USS/Posco reportedly had some of their customers on allocation and there were reports that due to the HRC dumping suits against Korea they were having some substrate issues. Our understanding is both of these mills will be in July when they open their order books.

Late this afternoon a second mill (SSAB) announced a price increase on plate and hot rolled of $60 per ton. NLMK USA was the first mill to announce increases earlier this week at $40 per ton which some mills evidently were questioning as being too low with scrap prices settling in the $40-$55 per gross ton range this week.

This is the kind of information we are collecting in the marketplace this afternoon:

“To my knowledge, Columbus has not opened for May.  They went out and asked everyone what they wanted but would not give a price and they have not gotten back to me so I must not have a high lottery #.” Service center

“The doors seem pretty well closed to the overseas mills who can ship in large tons so that would help the pricing for the domestics but this price run-up isn’t at all demand driven so that makes it a weaker scenario for the mills.  If I was putting money on a bet I’d pick $520 as a peak for HR.” Service center

“No lead times from AK Steel. I’m sure you’ve heard this from others, they are virtually out of the spot market.

It’s very frustrating right now, because SDI has not opened their May book yet, so they are not quoting.   Arcelor has not opened their June book yet, so they are not quoting. Nucor is sold out through July – so they are not quoting.   AK is not quoting.

I expect when the books open we are going to see base prices like this:

HR   24-25
CR   32-33
GI   33-34

The few customers we do not have covered are getting sticker shock, but basically are buying because they must.”  Service center

“Seeing new Spot HR around $24and CR/Galv a bit more aggressive, around $32.50+, all with or without announcements. I have not seen other public announcements [Other than NLMK this was before the SSAB announcement came out]. Generally speaking, public price announcements do not appear to be all that relevant in this market, as it’s more about individual mill’s needs/lead-times/etc.” Service center

You can learn more about what is driving this market in other articles (Lead Times, Negotiations, Sentiment, etc.) in today’s newsletter.

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