US flat product steelmakers are bucking the seasonal price trend, by pressing for a rise in local values, despite the summer lull in activity. Domestic suppliers, in an attempt to stave off the threat of further losses, introduced a series of list price hikes, during the July/August period. Local mills had little option but to implement such measures, as they aimed to recoup rising input costs.
Initially, buyers resisted the mills’ price hike initiatives. However, the US steel producers’ proposals helped to prevent further price deterioration. Subsequently, selling figures started to move up, despite US steel demand remaining steady, yet unspectacular. Automotive and construction activity is below last year’s numbers. The pipe and tube sector is healthy – although this product is exposed to high import penetration. Energy-related consumption is growing, albeit from low levels.
Domestic capacity utilisation, in the US, is approximately 81 percent, year-to-date. Mill delivery lead times remain relatively short, despite the impact of the summer outages for scheduled maintenance. Finished steel import volumes rose markedly, in July, partly due to the removal of Section 232 tariffs on neighbouring Canada and Mexico.
Consequently, many US buyers speculate that the recent pricing revival is likely to be short-lived. It is widely acknowledged that few market fundamentals, support a prolonged reversal of fortunes.
Source: MEPS International Ltd. – MEPS European Steel Review