SMU Market Chatter

Steel market chatter this week

Written by Laura Miller

SMU polled steel buyers on a variety of subjects this past week, including sheet prices, demand levels, buying activity, and what people are talking about in today’s marketplace.

Rather than summarizing the comments we received, we are sharing some of them in each buyer’s own words.

We’d like to hear your input as well! Contact to be included in our questionnaires.

When do you think sheet prices will peak, and why?

44% of buyers said prices have already peaked:

“Demand has not increased enough to sustain continued increases.”

“Scrap is not going up. It is cold everywhere, and there is more uncertainty on interest rates than a few weeks ago.”

“It seems that demand has not been enough to support further increases.”

“HR has peaked. GI is still a supply mess and may still run higher.”

19% believe they’ll peak this month:

“Forward curve/backwardation are bearish.”

“Demand hasn’t improved recently to support the price increases from mills.”

“We certainly appear to be in a market that is topping and/or already [topped]. Our biggest worry now is how fast and how low it reverses.”

19% believe they’ll peak in February:

“Spot market will soften as mills work through Q1 order book and look to fill Q2.”

“There seems to be a little gas left in the tank. The holidays obscured some demand, and it seems there is more in the way of bounce back than I projected [at the beginning of the month].”

17% believe they’ll peak in March, April, or later:

“There is a shortage of metal [on the West Coast] that will only be relieved with the wave of imports coming in March.’”

Hot-rolled coil prices averaged $1,045 per ton in our last market survey from Jan. 9. Where will prices be in two months?

21% said $949/ton or lower:

“Once buyers start pushing, it never moves down slow.”

“Slowing economy, imports, increased capacity.”

“Barring something unforeseen, I feel supply is greater than demand as we start the year.”

“Large volumes of imports coupled with soon-to-be relatively healthy inventory levels.”

“This prediction seems a bit reckless, but if recent history has shown us anything, it’s that our market always overcorrects itself.”

“The market won’t hold this price given lackluster demand and solid inventories.”

“$850-875 per ton range in March.”

33% said $950-999/ton:

“Weak demand, low utilization at mills.”

“I think it drops $100.”

“Demand will continue to be soft.”

“Imports are coming in. The steam is off.”

45% split on $1,000-1,200/ton or higher:

$1,000-1,049 “Flat demand.”

$1,050-1,099 “Current spreads to global markets, and scrap rates are impacting decisions.”

$1,100-1,149 “Scrap pressure.”

$1,150-1,199 “Demand may pick up, pushing lead times … leading to another attempt to raise mill prices for March.”

Are you an active buyer or on the sidelines?

Active buyer 57%:

“Active for back-to-back contracts.”

“Active, but only buying what we need and working to reduce our steel inventory after larger purchases made Q3 of last year.”

“Mainly import and committed monthly CRU orders.”

“But only buying as needed.”

Sidelines 43%:

“Well positioned – waiting for prices to come down.”

“If we are indeed at the top [of the market], there is no reason to buy heavy right now.”

“Completed 2024 buy, will not need any spot material until Q3 or Q4.”

“Buying what we need and watching for Q2 opportunities.”

“Holding on to lower-cost inventory, not wanting to replace with higher just yet.”

“Holding for the drop.”

“Buying our minimum mill obligations while the market falls.”

Laura Miller

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