Inventories held by steel service centers in US are at levels that should support the higher domestic mill prices announced last week, sources said Friday.
The $30/st price increases were being fully applied, according to one mill source. "Spot deals at any price levels are still small volume, but it's early," he added.
Inventories are low and it is key to the market "staying together," the source said, adding: "Customers [are] buying to their needs, [which] will maybe bring some long-awaited stability. Panic buying only leads to an inventory bubble, which would eventually pop. Based on lead times, the first half of 2017 is in really good shape."
Stable inventory levels coupled with an improving energy sector could carry the market through the second half of 2017 as well, the mill source said.
Cold-rolled coil prices were being discussed as high as $880/st, a trader said. However, he said it was only from two particular producers who had limited spot availability. He believed business was being done at $860/st. The trader added there was not much quoting for CRC, but he had witnessed healthy activity for coated product inquiries. "Our base prices for both are in the $860/st range when customers do pull the trigger," he said.
A second mill source said his price had moved to $860/st on CRC, but did not think "anyone was buying a pound of steel higher than $860/st."
S&P Global Platts maintained its daily HRC and CRC assessments at $640-$650/st and $840-$860/st, respectively. Both prices are normalized to a Midwest (Indiana) ex-works basis.
