US sheet steel buyers see continued stable pricing ahead and a modest drop before the end of the year, even though lower demand in recent weeks has concerned some people, sources said Thursday.
"I think the balance of the year will be pretty steady. Apparently, there are still a lot of buyers out there who are not caught up," a service center source said.
The Metals Service Center Institute said Wednesday that service centers carried 2.2 months of flat-rolled steel supply. The inventory-to-shipment ratio was essentially steady compared with April, because the inventories decreased 2.8% month on month while shipments decreased 0.9%. The service center source said he thinks there will be lower prices later this year, but not drastically lower.
A mill source agreed there was no expectation of "dramatic price drops ahead," but the market may pause for the next couple weeks or so. Perhaps galvanized sheet prices increased too fast, he said, but idled capacity, lower import levels and lead times out eight to nine weeks for many products will help to support prices.
The mill source said he saw galvanized sheet base pricing at $820/st and that cold-rolled coil pricing may be down to $800/st base. Hot-rolled coil pricing has been unchanged at $620-$640/st.
"I think everyone is thinking we're going to be on this plateau for a little bit," a mill source said.
The Platts daily HRC and CRC price assessments remained at $630-$640/st and $820-$840/st, respectively. Both assessments are normalized to an ex-works Midwest (Indiana) basis.
Another service center source said he has been avoiding spot purchases lately, but has seen spot HRC and CRC prices around $630/st and $820/st. He said there was probably not enough momentum to push galvanized sheet prices up further and they could come down to reduce the spread between HRC and CRC.
Hot-rolled coil prices should be steady in the $620-$640/st range for a while, he said. For the rest of the year, he said, mills "will be reluctant to let it go below $600/st."
