Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/b505a86b5fc071bb143535ae62165c8d.jpg)
High Steel Prices Strain Customers’ Credit Limits
Written by Tim Triplett
August 2, 2018
Boosted by the Trump tariffs, the high price of steel in the U.S. tends to mask other issues. Notably, strained credit limits. While mills report record profits, some of their customers report cash flow issues that threaten their very viability.
Steel Market Update canvassed the market this week and gathered the following observations from steel executives in distribution and manufacturing:
- “We are seeing the normal July summer slowdown. A number of customers are behind on payments and we have more companies on credit hold than ever in the past. The pricing of steel has risen to a point they are unable to pass it on to their consumers, so they are running inventory way down and spot buying only what they need that week. It’s very concerning, hearing Nucor having its second best month in history, then talking with over 50 small and medium-sized manufacturers that are struggling to pay the bills because the banks refuse to extend their credit lines further. Tariffs and Section 232 have done the job intended—the rich are getting richer and the heartbeat of American Manufacturing is struggling to make ends meet. So much for a fair and level playing field.”
- “I think the ability to pass on increased costs and increased credit lines are linked very closely. Banks would normally see the whole picture and—assuming that a customer faced with increased costs is charging (and getting) more—would realize it’s just a matter of needing higher cash levels to run the business. But due to the enormous variety of manufacturers out there, some can raise prices with minimal lag time, while others are tied into annual (or longer) contracted prices. The latter are typically the large OEMs, who face higher hurdles when attempting to raise prices because they have global competition. In a strange twist, many manufacturers need prices to remain elevated for an extended period in order to have better luck in getting increases to stick. In the prior bull markets, they knew they just had to ride out the storm until the prices corrected. This time around, I don’t believe they will get the relief that a big price correction would otherwise provide.”
- “We are seeing a few issues with late pay, but very restricted in nature. Our late pays are tied to a couple of customers that overextended their ability to pay due to a large pre-buy in an effort to avoid the tariffs. In our markets, we are seeing the pricing as leveled, and demand is still fairly strong. I agree, things are not good for the end user. It’s a real squeeze.”
- “Higher prices are impacting credit limits. However, I believe companies are managing. Everyone has pushed the increases along. There is a pause in the market as people believe we have been at the peak of the current cycle and there is more downside risk than upside in the future. As far as the mills’ behavior, they continue to act as they have in the past. They always push price whenever the market allows them to.”
- “Credit issues have occurred before when we’ve had these sorts of runups. This is not just a Section 232 issue. But we’ve seen where customers are maximizing their credit lines and then moving part of their business elsewhere.”
- “Non-healthy businesses get healthy in times like this, which isn’t necessarily a good thing. Inefficient assets are just that, unless dollars are poured into them to become viable when the downturn occurs (and it will). Money is being made—how it’s being managed is a different challenge that each company fights through.”
- “The credit issue is causing problems with us, as well. Something has to give. Tariffs on steel do nothing unless products made of steel are included. I believe China needs us more than we need them, resulting in some type of compromise that ultimately will benefit everyone in the U.S. We shall see.”
- “Unfortunately, our government has chosen who will be the winners and who will be the losers. What makes for bold headlines will win the day. In the case of farmers who are being hammered by export tariffs, let’s just give them $12 billion (a government subsidy) and hope they still vote Republican. It’s ironic that this trade talk all started based on foreign governments subsidizing industries, but now we are doing the same thing.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/tim-triplett.jpeg)
Tim Triplett
Read more from Tim TriplettLatest in Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Longs pricing trends diverge in North, South America
Most longs prices in the US were unchanged this month, except for rebar, which declined by $1.50/cwt ($30/short ton) m/m. While end-use demand is stable, inventories are well-stocked, keeping purchases limited. Domestic availability is sufficient to meet current demand, hindering the appetite for imported material. Meanwhile, prices for scrap remained under pressure in June, with […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts plate prices by $125/ton, cites ongoing competition
Nucor Corp. announced that its plate mill group would cut prices for as-rolled, discrete, and normalized plate with the opening of its August order book.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts HR price for fourth straight week
Nucor lowered its consumer spot price (CSP) for hot-rolled (HR) coil by another $10 per short ton (st) for the first week of July. The steelmaker said in a letter to customers on Monday that its CSP base price for the week will be $670/st for all of its sheet mills with the exception of California Steel Industries (CSI).
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sets $720/ton HR price with opening of August books
Cleveland-Cliffs on Tuesday announced its monthly hot-rolled (HR) coil price of $720 per short ton (st) with the official opening of its August order book. The rate is down from last month’s price of $800/st.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]