Hot-Rolled Steel Sheet Drops to $480/ton; Cheaper Imports Available
The steel sheet market has continued to weaken this month with buyers reporting spot prices for prime hot-rolled sheet in coil around $480/net ton, down from the $499 price average of February. Cold-rolled sheet is down to $578/ton from $588 last month. These prices are somewhat tentative because buyers say they aren’t ordering very much tonnage these days.
The subscription newsletter Steel Business Briefing says hot-rolled sheet prices are quoted as low $440-460/ton are for secondary material but buyers tell Purchasing.com that Mexican-made sheet under 60-inches in width is being offered as low as $450. This matches earlier reports in Purchasing magazine that collapsed demand and lower prices at home at a time when supply has expanded will make more steel mill products from Mexico available for buyers in the U.S. and Canada.
Besides weakened demand from buyers in distribution and end-use industries, sheet prices are sliding since the U.S. scrap market is very weak--with prices dropping again this month--as the steel mills, continue to operate under 45% of capacity. In fact, the American Iron and Steel Institute reports that adjusted year-to-date production through February 28,2009 was 8,651,000 tons, at a capability utilization rate of 43.4%.That is a 52.7% decrease from the 18,281,000 tons poured during the same two-month period last year, when the capability utilization rate was 90.9%.
Demand for steel from service centers declined 9% in February from January with purchasing off 36% from a year ago, according to Longbow Research steel analyst Bob Richard in Chicago. He adds that the buying outlook for the next several months remains grim, matching the low-key outlook from buyers polled by Purchasing.com.
Richard says the distributors he surveyed have a negative outlook on pricing, “and expect further declines in the near-term.” So, his contacts “continue to reiterate their caution of purchasing excess inventory until they sense some stability in the market.”
In the same vein, analyst Mark Parr at KeyBanc Capital Markets in Cleveland today tells clients that “we lack evidence of end demand recovery across most key end markets, and pricing metrics for scrap and steel products look likely to remain in a downtrend for March.”
The subscription newsletter Steel Business Briefing says hot-rolled sheet prices are quoted as low $440-460/ton are for secondary material but buyers tell Purchasing.com that Mexican-made sheet under 60-inches in width is being offered as low as $450. This matches earlier reports in Purchasing magazine that collapsed demand and lower prices at home at a time when supply has expanded will make more steel mill products from Mexico available for buyers in the U.S. and Canada.
Besides weakened demand from buyers in distribution and end-use industries, sheet prices are sliding since the U.S. scrap market is very weak--with prices dropping again this month--as the steel mills, continue to operate under 45% of capacity. In fact, the American Iron and Steel Institute reports that adjusted year-to-date production through February 28,2009 was 8,651,000 tons, at a capability utilization rate of 43.4%.That is a 52.7% decrease from the 18,281,000 tons poured during the same two-month period last year, when the capability utilization rate was 90.9%.
Demand for steel from service centers declined 9% in February from January with purchasing off 36% from a year ago, according to Longbow Research steel analyst Bob Richard in Chicago. He adds that the buying outlook for the next several months remains grim, matching the low-key outlook from buyers polled by Purchasing.com.
Richard says the distributors he surveyed have a negative outlook on pricing, “and expect further declines in the near-term.” So, his contacts “continue to reiterate their caution of purchasing excess inventory until they sense some stability in the market.”
In the same vein, analyst Mark Parr at KeyBanc Capital Markets in Cleveland today tells clients that “we lack evidence of end demand recovery across most key end markets, and pricing metrics for scrap and steel products look likely to remain in a downtrend for March.”
quoted from: www.Purchasing.com
