US sheet steel market still fighting with stock overhang
The US sheet market expectation stayed bleak Tuesday as buy-side sources claimed much more rate deterioration is likely en route.
One service center source claimed steel is being rolled virtually the day after an order can be found in, and shipment times now comprise the bulk of released lead times.
" By the time costs rebound, we might be looking at warm temperature levels," he said. "My state of mind today is not very hopeful."
A broker claimed that both cold-rolled as well as hot-rolled rate expectations are trending lower, also if most mills have not yet relocated to satisfy them.
When they do, he said, it is unlikely to change the general tone of the market as service center stocks remain puffed up with formerly imported steel. He included that mills must be careful regarding chasing after "ghost lots" for the next 30-45 days and pressing rates too reduced.
" They've reached be careful they're not going after orders that aren't there," he claimed. "If you put even more life watercrafts on the Titanic, you do not wait. There's still water."
A Midwest solution center source said steady end-user demand is the only point maintaining the marketplace from penetrating a "devastating" scenario. At least one significant mill is still refusing to cut capacity as well as is proactively attempting to "take on imports" by lowering its rates, an approach that could cause a profession situation filing in the future, he stated.
Till capacity comes down and a profession situation is filed, nevertheless, falling scrap and various other raw material prices will certainly keep mills' placements weak, he said. "Something major needs to go down or this (rates) will go down an additional $40-$60/st," he claimed.
A second solution facility source who is presently energetic in the spot market claimed he has the ability to obtain $520/st for 500 st of hot-rolled. byk additives for coatings -- a truckload or more-- are at $540/st, he claimed.
At the marketplace's current pace, the resource anticipated sub-$500/st hot-rolled before the market hits full bottom. Cold-rolled and hot-dipped galvanized rates, which have actually been extra resistant than hot-rolled as a result of the car market, could additionally quickly suffer a "sharp modification." At the very least some cold-rolled offers, without volume or area defined, have been seen at $645/st, he claimed.
Platts held its hot-rolled assessment company Tuesday at $540-$550/st as well as its kept its cold-rolled assessment at $680-$700/st. All prices are normalized to a Midwest (Indiana) ex-works basis.