Still no cure for the summertime HR market blues

The operator of a Midwest-based service center said that steel buyers are scared.  

“Everyone is afraid to buy steel right now. Unless you’re on a program with a mill that is aligned to the CRU numbers, buying spot is a scary proposition,” he said.  

He also explained that he’s seen a small positive shift in consumer sentiment because his customers are beginning to alter their purchasing patterns, but he does not think anyone is in “good spirits.” 

“Our customers have adjusted by giving us a longer lead time for tracking down the products they want. They are making timeline adjustments and checking in with us more often,” contends the same midwestern service center source.  

A second source in the same region says he is experiencing a state of total stagnation.

“I am not seeing anything different than last week.  No change in pricing.  No chang in lead-times.  No change in volume.  New orders are still down, and shipments are still down,” said the second source.

Demand won’t budge

The overall lack of demand is causing stress. Despite market participants anticipating flat to lower prices in the coming weeks, end market demand shows no promising signs of increases, in their assessments.  

“Demand is still pretty crappy for everyone we talk to. I don’t know anyone who can honestly say that demand is good,” stated a distributor in the Pacific Northwest.  

The point was underscored by other market participants in the Midwest.  

“Demand has declined from last year and has declined from the last round of 232 tariffs announced on May 30,” said an Ohio Valley-based distributor.  

A different Midwest-based source said the week mirrored last week, “Same, slowing economy, buyers buying only what they need.”  

Participants say that they’ve been paying in the range of $835-850 per short ton (st) this week. One source said that a very small volume of HR transacted at $860/st.  

Optimism for rosier skies in H2

On July 29, SMU reported the price range for HR is $780–900/st, averaging $840/st FOB mill, east of the Rockies. 

The cure for soft demand may not come before summer’s end, but some participants are optimistic it’s coming before the end of the year.  

“In general, I feel prices will stay pretty flat over the next three months. Demand isn’t great, but there likely will be some restocking later in the third and fourth quarters and mill maintenance will hit soon. There is still plenty of capacity to fill though, so that will keep prices from moving up too much,” stated a Dakotas-based participant.  

A West Coast based participant shared the same optimistic outlook. 

“Now that some tariff deals have been made, we’ll probably see more offers soon. More consistency is what we are looking for. I think we’re going to see more of it.”