Final Thoughts

John Packard is on vacation…

Have the mills lost their pricing momentum on flat rolled? It sure looks that way, based on the latest Steel Market Update data.

About 38 percent of the OEM and service center executives responding to SMU’s market trends questionnaire this week report that the mills have lost their momentum and flat rolled prices are already moving lower. Nearly all the rest say the mills are struggling to maintain the price gains they saw when they raised prices back in July. Only 3 percent say the mills are in control and prices will continue to rise over the next 30 days.

Other SMU data corroborates that view. The vast majority of steel buyers say the mills are open to negotiating spot prices to secure orders, and lead times show signs of shortening, which suggests the mills are not as busy as they would wish. Adding to the downward pressure on steel prices is a $30-40 per ton decrease in the price of ferrous scrap this month as the mills anticipate weaker demand and shutdowns for fall maintenance.

“Lead times grew after the first two price announcements, but they’re now short again,” commented one respondent. “The lower cost scrap will not help steel pricing,” said another. “Hopefully the mills won’t break ranks,” added a third, though in terms of the last round of price increases, it appears the ranks are already broken.

SMU regretfully had to turn away some folks when the last Steel 101 workshop sold out. It’s not too early to sign up for the next one. Registrations are now being accepted for the upcoming Steel 101 in Ontario, Calif., Jan. 7-8. The program will include classroom instruction, networking opportunities and a tour of the California Steel Industries mill. Click here for more information.

Reach out to Paige Mayhair if you have any questions in John’s absence. Paige can set up new accounts, handle renewals and respond to most inquiries. She can be reached at 724-720-1012 or by email at: Paige@SteelMarketUpdate.com

As always, your business is truly appreciated by all of us here at Steel Market Update.

Tim Triplett, Executive Editor