Final Thoughts

Final Thoughts

Written by Tim Triplett


John Packard is traveling…

To almost no one’s surprise, the mills raised flat rolled prices by $40 a ton on Thursday and Friday in the hope of reversing the slide that has taken hot rolled as low as $470 a ton. Seven out of 10 steel buyers responding to SMU’s questionnaire last week said they were expecting a price increase soon. Now the market will be watching closely to see if the increase is going to stick. That’s no sure bet given the current shaky state of steel demand in some sectors.

Forty-five percent of the buyers polled reported that demand from their customers is on the decline. Another 46 percent described demand as flat or stable. Less than 10 percent are experiencing improving demand for their products as the market moves into the seasonally slow fourth quarter.

Following are some of their more insightful comments:

“Whether seasonal or more fundamental, demand is slipping at this time.”

“We are seeing further demand reductions for Q4 from our customers.”

“I expect the domestic mills to throw a price increase out there just to try and stop the bleeding.”

“I would have thought they would have raised prices already. Are we seeing a turf war developing between the integrated mills and the minimills?

“Unless there is true demand, the increase will have no teeth like the last three.”

“I believe demand is there just sitting on the sidelines waiting to see who survives the circular firing squad!”

Another reminder that there are still seats open for SMU’s next Steel 101 workshop set for Ontario, Calif., on Jan. 7-8. The event will include a tour of the California Steel Industries mill. For more information and to register, visit www.SteelMarketUpdate.com/Events/Steel101

As always, your business is truly appreciated by all of us here at Steel Market Update.

Tim Triplett, Executive Editor

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Final thoughts

Last week was a newsy one for the US sheet market. Nucor’s announcement that it would publish a weekly HR spot price was the talk of the town – whether that was in chatter among colleagues, at the Boy Scouts of America Metals Industry dinner, or in SMU’s latest market survey. Some think that it could Nucor's spot HR price could bring stability to notoriously volatile US sheet prices, according to SMU's latest steel market survey. Others think it’s too early to gauge its impact. And still others said they were leery of any attempt by producers to control prices.