Weak business confidence keeps US flat product steel prices in check
Friday, 08 June 2012 | 11:00
US flat product selling figures dropped in May according to the latest report by MEPS (International) Ltd. There is domestic overcapacity of hot rolled coil. Local mills are facing severe competition from attractively priced Russian coil due to hit the docks.
Demand for commodity grade plate from the building industry and for bridgework remains at a low level but is forecast to recover later in the year. Orders on the mills from the energy sector have stayed strong and are expected to continue to do so for the foreseeable future. However, US steelmakers have reduced their transaction values a little, ahead of the imminent arrival on the east coast of cheap foreign plate.
Buyers felt that general demand for cold rolled coil was not sufficiently strong to warrant acceptance of US producers’ price hike ambitions. Nevertheless sales to the auto sector are good. The same is applicable for coated coil, despite transaction values having contracted further. There are expectations that demand from the construction sector could improve. However, for the time being, market activity continues to be dull.
US flat product transaction values are likely to drop further over the coming months because customers are likely to adopt a “wait and see” approach given the uncertainty surrounding price trends. There is the possibility for a temporary spike in selling figures at the end of the third trimester because customers may need to rebuild stock levels.
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