As prices soar to historical high levels, we are constantly probing, looking for signs of a crack in flat rolled or plate steel prices.
Nucor announced higher plate base prices today with discrete plate being referenced at $51.00/cwt ($1,020 per ton).
Here are some of the “interesting” comments we received from steel buyers this week:
A hot rolled and plate steel service center told us, “We stopped buying the offers coming our way after the last $100+ increase two weeks ago. Seems like the panic may subside and without panic there is no support for even $55 or $50 HRC. Based on costs, we have many dollars per ton to drop, so we are waiting to see what happens for the next month. Our demand is dropping as well, so it makes it easier to say, ‘no thanks’ to the mills.”
A painted Galvalume buyer told us, “The supply chain is so bad it seems reasonable that we will continue to see some increases. The good side of that is, I think it gives an opportunity to get some offshore material. Even when the pricing does start to calm down, I don’t think the supply chain will allow for a crash in steel pricing, so hopefully by the time we see the offshore, we are not upside down on it.” He added, “We are buying a few thousand offshore tons right now. Not sure how great the buys are considering the current price and where it might be in June, but the allocations have us in a spot where we feel we have to know we will have some tons on the floor before the fall.”
One large flat rolled service center with multiple operations said this about steel prices, “Scrap leveling off/dropping slightly will put a damper on some of the upward pressure, but I highly doubt it will head lower anytime in the next couple of months…. [We are buying] just enough to maintain our current inventory levels, which are very low, like most others, which will keep the mills fuller than we have seen in the past in a down market.”
One plate buyer made a comment about buying foreign plate, “No, I’ll close my doors before I buy at these prices.”
An end user who reported paying $1,200 per ton for hot rolled this week added, “Yes, I have to buy when I can find supply. Demand is very strong and inventories are starting to run low.” He went on to say about foreign steel, “We have some foreign steel on order, but volumes are not available to count on. In 2018, there were as many tons available as I wanted to buy; this time around there are limited tons to buy and everyone is fighting over them.”
A number of steel buyers told us they were buying off of their contracts at lower numbers than what was available in the spot markets. Most buyers are not buying foreign steel because of long lead times and prices being too high from the trading companies.
Tampa Steel Conference continues to fill up, and here are some of the companies that registered this week (those with * means more than one person registered): AM Tubular Products, Behlen Mfg. Co.*, Benjamin Moore & Co, BMG Latin America Inc., BNSF, Brown Brothers Harriman, Crowe*, Heating and Cooling Products*, HSM – HS MetalWorks, Laminar Metals, Liberty Steel Group, Logistec USA Inc., Manesa, Material Sciences Corporation*, PLS Logistics, PSA Penn Terminals, LLC, RHI Magnesita, Rukert Terminals Corporation, South Jersey Port Corporation, UBS Securities LLC*, Wastequip LLC, Webco Mfg., Inc.
There is still time to register for the Tampa Steel Conference, which will be held next Tuesday, Feb. 2. We will soon open the platform, which allows registered attendees to interact with each other, review the agenda and put reminders into your office calendars, view sponsors’ booths, etc. To learn more about the agenda, biographies of the speakers and costs to attend, you can click here.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com
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