SMU Data and Models

Steel Market Chatter This Week

Written by Becca Moczygemba


On Monday and Tuesday of this week, SMU polled steel buyers on a variety of subjects, including steel prices, demand levels, and import offers. Rather than summarizing the comments we received, we are sharing some of them in each buyer’s own words.

We want to hear your thoughts, too! Contact david@steelmarketupdate.com to be included in our questionnaires.

When and at what price level do you think steel prices will bottom, and why?

“$650 – I don’t foresee enough resistance in the market to stop it from eventually getting that low.”

“I suspect we will see the bottom in September or October. Foreign seems to be setting the future price, so I anticipate a base in the mid- to high-40s.”

“HRC will bottom around $700 in November/December.”

“I figure we won’t see any sort of leveling until post-summer. So, if we’re averaging $20/ton per week, it starts to get pretty scary.”

“I think prices bottom during July lead times, so in the next two weeks. Index prices make their way into the mid- to low-$800 range, while large buys get done $60-100 below that.”

“The market appears to be heading toward sub $800 HRC. Mid-July will be the turning point.”

 

Is demand improving, declining or stable, and why?

“Demand has been declining. Customers are aware that prices are dropping and are doing their best to ride it out.”

“Demand is softer. Customers are anticipating slower third and fourth quarters and are reducing buying to reflect this.”

“Declining slowly as backlogs are slipping and we are headed into summer slowdown.”

“Declining as OEMs are seeing demand drop.”

“Demand is declining but driven by buyers lowering their inventories; actual demand is fairly stable. Buyers are making it look way worse than it is.”

“Plate demand remains stable. Energy and infrastructure projects remain strong and continue to consume capacity.”

 

Is inventory moving faster or slower than this time last year – and why?

“Slower, demand has gone from high to stable.”

“Cannot keep inventory. Sales would be much better for those who actually have stock. No stock, no sales.”

“Inventory is moving at roughly the same pace as this time last year. We were in a similar market at that point.”

“Moving slower now as we slow down. It seems like it’s faster because folks are stocking less.”

“Slower, due to low manufacturing demand.”

“Inventory is moving the same, but it probably helps that service centers are trying to be lean.”

“Faster, we targeted an increase in sales this year and we are executing on that plan.”

 

With domestic prices still at a premium to imports, are you finding offshore product more attractive? Why or why not?

“Domestic pricing is quickly dropping to match imports, not much interest in import prices with long lead times right now.”

“Yes, imports are starting to look more attractive for specific types of business, but lead time is still a worry.”

“Absolutely. We are getting more and more calls from domestic mills trying to bat away imports. And we aren’t even that big of a consumer, so I assume the “big boys” are already seeing crazy deals out there.”

“No, the futures market is in range versus imports.”

“Yes, still a significant spread between offshore and domestic pricing.”

“No, domestic prices are falling too fast to make import buys right now.”

 

Do you have any recent import offers or transactions to report on either sheet or plate?

“Discrete plate offers that I have seen are not worth pursuing. Domestic prices will remain propped up.”

“$820 for August shipments.”

“$780-800 South Korea offer.”

“Galvanized offer from Turkey which is only $4.00/cwt less than domestic with a September arrival.”

“Imported plate is arriving 20% cheaper than the price of domestic plate.”

PSA: If you have not looked at our latest SMU Market Survey results, they are available here on our website to all Premium members. We refer to this as our ‘Steel Market Trends Report,’ and we publish updates every other Friday. We encourage readers to explore the full results, as we simply cannot write about all of the information within. After logging in at steelmarketupdate.com, visit the Analysis tab and look under the “Survey Results” section for “Latest Survey Results.” Historical survey results are also available under “Survey Results History.” We will conduct our next market survey next week – contact us if you would like to have your company represented.

By Becca Moczygemba, becca@steelmarketupdate.com

Becca Moczygemba

Read more from Becca Moczygemba

Latest in SMU Data and Models

SMU market survey results now available

The latest SMU market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Historical survey results are also available under that selection. If you need help accessing the survey results, or if your company would like to have your voice heard in our future surveys, contact info@steelmarketupdate.com.