The US sheet market saw a split in service center buying needs Tuesday, as some were still heavy from the fourth quarter or able to live off contracts, while others were caught short and trying to get orders in amid tight supplies.
Last week's Metals Service Center Institute service center and shipment data indicated that overall inventories held were on the decline, as March carbon flat-rolled levels decreased for the sixth consecutive month to 4.99 million st, down 15% year on year.
A service center source said he was not active in the spot market and was "primarily utilizing our contracts." However, he noted that prices were "definitely higher."
"I think the low March inventories help to explain why we are seeing availability so tight now and the extreme run up. Pipelines were pretty lean and now people [are] trying to restock and get orders in before further increases," he said. The situation "ends up feeding on itself and running higher."
A second service center source said he was still carrying some inventory form the fourth quarter of 2015, which was beneficial in the current rising price environment. However, he said there were plenty of other service centers during the first quarter that anticipated the market would fall back down -- but that never happened, so they now have had to jump back into buying amid rising prices.
The source said he did not anticipate prices would start "dropping anytime soon." He added that the rising prices at first were strictly at the mill level, due to service center customers not believing the increases, but now resale prices have increased as well.
A third service center source said there were "no deals to be had" at the mill level and there was "nothing going to stop the run up at this point." He added he was seeing hot-rolled coil prices at approximately $500/st, and $680-$700/st on cold-rolled and coated sheet.
Platts maintained its daily HRC and CRC assessments at $500-$520/st and $680-$700/st, respectively. Both prices are normalized to a Midwest (Indiana) ex-works basis.
