US sheet steel prices continued to seek a bottom Thursday as market sources cited slow seasonal buying and little immediate impact from the US' recent termination of a duty suspension agreement with Russia.
One buyer said "any Joe Schmo" could get domestic Midwest hot-rolled coil at $640/st and cold-rolled coil at $760/st. Buyers looking for a few thousand tons can expect to pay $620/st, while tubers and other large-volume buyers are paying closer to $600-610/st, he said.
The US' termination of its suspension agreement with Russia could theoretically give pricing a boost, he said, "but things are so weak." He added that the suspension agreement is effectively a trade case win; even if it lends strength to the market short-term, new players will inevitably replace the missing tons.
A West Coast buyer said Turkish and Brazilian suppliers are already lining up to snatch market share formerly held by Russia. One Brazilian supplier is looking to place 10,000 st in the Los Angeles market, he said, and market contacts in Houston are telling him their volumes are good, but their margins are compressed due to imported material.
"I don't think they're going to get any pricing momentum out of it," he said of the suspension termination. "Our North American prices are still attractive."
However, eliminating Russian tons from the market does prevent other foreign suppliers from having to compete with their exceptionally low prices, he said.
Nucor CEO John Ferriola echoed that sentiment on an earnings conference call Thursday with analysts.
"It's more than just taking the tons out of the market, although there are a lot of tons that will be coming out of the market at that lower price," he said. "But the more important factor, frankly, is that the termination of the suspension agreement raises the floor of the sheet pricing in the market. The Russians were certainly setting the floor, it was a very low floor, and by taking their ability to do that out of the market, that's going to be a plus for us and for our competitors."
Some buyers and mill sources alike suggested that the suspension agreement might even spur some domestic producers to attempt a price increase, though reactions were mixed.
"I think the only justification they are weighing would be trying to send a message that the price is not going to continue falling," said one buyer.
Another said it could make sense to pack fourth-quarter order books. "If they got enough spot buys with guys who had to cancel Russian [purchase orders] then maybe they announce one effective 1/1/15 that fills up your Q4," he said. "Who knows."
Platts tightened its hot-rolled range from $640-655/st to $640-650/st and its cold-rolled range from $760-775/st to $76-770/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
