Friday, 26 August 2011
An east coast service center told us earlier this week, “The mills have announced a $60 per ton increase, which brings the pricing to $41.00 cwt fob the producing mill [galvanized].
I am hearing that most of them are holding their price, but as you know, they have not collected any of it. The mills gave everyone the opportunity to purchase additional tons at the “old” price and most everyone did that. The true issue is that no one is carrying large amounts of inventory, so we need to purchase steel every week, the price becomes secondary for we cannot sell from an empty shelf.
As I previously stated, there is no weakness for no one has issued orders at the most recent published price. Lead times are into October, but there is no real backlog.”
A Midwest service center executive voiced what is probably true at many companies this week, “Not really hearing much-all is quite on the western front Seems like everyone is just watching….? I haven’t been searching yet either.”
So the market sits back and waits. Most buyers have made their September and perhaps October buys and now are waiting to see what happens next. We continue to hear comments from steel executives referring to their memories of 2009 and not wanting to get sucked into buying more steel than they can sell over a short period of time.
Demand is still an open question which will take a few weeks to become clearer. The companies with whom Steel Market Update has spoken late last week and earlier this week have not seen demand destruction and are speaking of demand as remaining stable.
The domestic mills are apparently trying to get a piece, if not all of the announced $60 per ton increase.
One of the steel mills told us in an email, “It looks like everyone is trying to get $60. Lead times are normal, which means they have improved over the last 4 weeks. Order size has increased a bit but still not back to historic levels. [There is] Lots of talk about another increase so it wouldn't surprise me.”
While a manufacturing company told us, “Still too early to tell, but we are being offered $660/ton without asking. We don’t see lead times moving out more than a few days. The rumor may get more people to buy what they need immediately, but no one is building any inventory.
The real news that hasn’t sunk in with the mills is the economy, the melt down on Wall Street, and the level of industrial activity, construction, and consumer spending in the next six months. I don’t think the mills have it figured out yet.”
This came from a Midwest service center executive, “Hi John. Interesting times. We're a buyer at less than the $60. Even in the few days after we were paying zero more for orders placed then. Your question is a good one on whether or not the mills will go for a second increase. I think it depends on how full they get and how much of the first increase they collect and also how demand holds up in the next month. We have not seen, knock on wood, any decrease in demand following the stock market turmoil of recent days.”
Source: SteelMarketUpdate
An east coast service center told us earlier this week, “The mills have announced a $60 per ton increase, which brings the pricing to $41.00 cwt fob the producing mill [galvanized].
I am hearing that most of them are holding their price, but as you know, they have not collected any of it. The mills gave everyone the opportunity to purchase additional tons at the “old” price and most everyone did that. The true issue is that no one is carrying large amounts of inventory, so we need to purchase steel every week, the price becomes secondary for we cannot sell from an empty shelf.
As I previously stated, there is no weakness for no one has issued orders at the most recent published price. Lead times are into October, but there is no real backlog.”
A Midwest service center executive voiced what is probably true at many companies this week, “Not really hearing much-all is quite on the western front Seems like everyone is just watching….? I haven’t been searching yet either.”
So the market sits back and waits. Most buyers have made their September and perhaps October buys and now are waiting to see what happens next. We continue to hear comments from steel executives referring to their memories of 2009 and not wanting to get sucked into buying more steel than they can sell over a short period of time.
Demand is still an open question which will take a few weeks to become clearer. The companies with whom Steel Market Update has spoken late last week and earlier this week have not seen demand destruction and are speaking of demand as remaining stable.
The domestic mills are apparently trying to get a piece, if not all of the announced $60 per ton increase.
One of the steel mills told us in an email, “It looks like everyone is trying to get $60. Lead times are normal, which means they have improved over the last 4 weeks. Order size has increased a bit but still not back to historic levels. [There is] Lots of talk about another increase so it wouldn't surprise me.”
While a manufacturing company told us, “Still too early to tell, but we are being offered $660/ton without asking. We don’t see lead times moving out more than a few days. The rumor may get more people to buy what they need immediately, but no one is building any inventory.
The real news that hasn’t sunk in with the mills is the economy, the melt down on Wall Street, and the level of industrial activity, construction, and consumer spending in the next six months. I don’t think the mills have it figured out yet.”
This came from a Midwest service center executive, “Hi John. Interesting times. We're a buyer at less than the $60. Even in the few days after we were paying zero more for orders placed then. Your question is a good one on whether or not the mills will go for a second increase. I think it depends on how full they get and how much of the first increase they collect and also how demand holds up in the next month. We have not seen, knock on wood, any decrease in demand following the stock market turmoil of recent days.”
Source: SteelMarketUpdate
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