SMU Market Chatter

Steel market chatter this week

Written by Laura Miller

What are folks in the steel industry talking about?

SMU polled steel buyers on a variety of subjects this past week, including domestic steel prices, import offers, buying activity, and more.

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

Steel prices seem to have peaked and may be on the way down. Do you agree? How do you expect prices to trend over the next three months, and why?

“HRC collapsing; take it to the bank!”

“The futures debacle with Goldman Sachs caused a false psychological drop in the market by scaring buyers, and inventories are still very low; it seems there could be another squeeze when everyone rushes back to the market.”

“HRC has peaked. CRC and galvanized/Galvalume are more stable.”

“We do agree that we’ve peaked. The question now is how much of an ‘overcorrection do we see on the downside? If history is any indication, it’ll be a big one.”

“Agree that prices have reached a peak. See the trajectory down but not off a cliff. While demand may not be robust, there will still be weather issues, scrap fluctuations, import arrivals, and mills’ tolerance for margin erosion to keep the bottom from falling out.”

“I do agree that prices have peaked but believe that the fall-off will be slower than buyers are expecting. Mainly because of shipments being strong to start the year and expecting low inventories coming out of January.”

“Agreed, pricing has peaked and will lower over the next couple of months. Demand seems to be fairly stable, so I don’t think the valley will be quite as low as late Q3 of 2023.”

“Yes. I would estimate that we will be down in the $800 range in late Q1.”

“I expect prices to continue their downward trend. For orders that aren’t very significant in size, I am being offered pricing that was in line with what we paid in November.”

“Yes, I agree. Mill lead times have been stable to contracting the last week or two. I expect prices to slowly come down. No reason for people to buy unless their imports are late.”

“Expect prices to soften but not terribly quickly over the next weeks. February will be lower than January.”

“Prices have peaked, and reductions are starting due to weak demand, and supply is also good.”

“I’m half expecting an increase on discrete plate within the next week or so.”

Is demand improving, declining, or stable, and why?

“Improving but in a building-up, on-the-fence kind of way.”

“Demand seems steady but weaker for imports.”

“Stable from a contract standpoint, but very slow on spot business as customers wait for pricing to drop.”

“Demand is stable in our sector, but we’re hearing mixed-to-down messages from service centers and mills.”

“Stable, no massive change in demand.”

“Stable for the winter months for us.”

“Demand is stable, better on the contract front year-over-year. Automotive is strong. Spot buying has been light.”

“Stable to soft.”

“Stable.” – Ten respondents

“Declining.” – Two respondents

Are imports more attractive vs. domestic material? Why or why not?

“Depends on product and source. Pre-painted galvanized and Galvalume are. HRC has some risks.”

“Some attractiveness, but concerns linger over whether or not imports will land at a good price given the lead times involved.”

“They were. But at current lead times, they don’t look promising.”

“Imports are still very attractive to those who can wait a bit. We’ll see how long that remains true (as domestic figures continue to drop).”

“Not with a falling domestic market. I’m not sure where the price is going to be in two or three months. Futures are expecting everything to take a nosedive.”

“Yes, on price, but perhaps not on timing.”

“Imports are balancing the upward price activity.”

“Imports are more attractive than domestic, but not as attractive as the futures market.”

What’s something that’s going on in the market that nobody is talking about? 

“90% of folks do not understand the weakness in the HRC market.”

“The Goldman Sachs futures debacle.”

“The new UAW contract is making the Big Three make some hard labor decisions (layoffs). This may lower steel usage.”

“The effects of the Suez and Panama Canal disruptions will have on import offers.”

“Seeing pricing start to dip below $1,000/ton for HRC will be telling. We are an industry that feeds on emotion and on headlines. The indices falling below that once-lofty level is a big psychological deal.”

“Lead times for hot rolled – they are weaker than what is being reported. Mills have holes in their order books for all products.”

“2024 US election outcome has the potential to disrupt cross-border (Mexico and Canada) steel supply.”

Care to share your thoughts as well? Contact to be included in our questionnaires.

Laura Miller

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