Limited new activity was heard on Tuesday in the US sheet market but buyers anticipated further upward pricing pressure as a result of higher mill input costs.
S&P Global Platts maintained its daily hot-rolled and cold-rolled coil assessments at $550-$560/st and $760-$780/st, respectively. Both prices are normalized to a Midwest (Indiana) ex-works basis.
A buy-side source said he had a Midwest and Southeast mini-mill pegged at $550/st for HRC pricing, but the majority of the market was at $560/st. He added that if you needed steel, $560/st would likely be an alright price to pay for HRC as upward momentum was likely to continue. However, "I don't think a lot of people need steel at the moment," he said.
The buyer believed there were a lot of people who purchased their December and January HRC tons at pre-increase levels, limiting their current appetite for new orders. In addition, "old habits are hard to break ... [buyers] were living hand to mouth on two to three week lead times," the buyer noted, adding it would take some time for them to realize that not only are lead-times extended, but the mills are serious about the higher quotes.
A service center source said prices were moving up and he had paid as much as $560/st for spot HRC from an integrated mill for December delivery. Regarding end-use demand, a second service center source said a lot of original equipment manufacturers (OEMs) "came back to the table once the increasers came out. I don't think there [are] any skeptics on the longevity [of higher prices] but a lot of OEMs seem to have excess inventory going into Q1 because demand has been off so much."
In addition, he said mills were holding firm with the offers they had out there, and he did not expect it to change around the holidays.
Zinc coating extras were also adding to the price momentum for hot-dipped galvanized as most mills adjusted published prices upwards. "Another input costs driven market," the second service center source said. "If demand picks up in the first quarter, we are in for a good first half of the year."
