Mostly steady expectations for steel in US market: Platts survey

US steel market participants reported mostly stable expectations across all categories for August, according to the monthly survey of the market by S&P Global Platts.

In the survey of US producers, distributors, traders and end-customers conducted ahead of August, the index for finished steel price development was the most bullish, but still expressed an only slightly stronger outlook at 59.72, indicating muted but still-present expectations for continued increases.

Distributor respondents and traders were the most bullish about August finished steel prices, posting 62.5 and 56.25, respectively. End users’ responses came in just slightly above ‘unchanged’ at 55.

Raw material price sentiment expectations were flat with an index of 50, with traders holding the most bearish price outlook for steel inputs, posting 37.5.

“Even though scrap prices may ease in the short term, demand, backlogs, and mill outages will keep supplies of longs tight, and prices will stay stable-to-up unless scrap takes a significant ($50-$80) drop, in my opinion,” said an long product end user.

“Scrap and other commodities will continue to tighten, driven substantially by lack of transportation and labor,” said another respondent.

Finished steel inventories are again expected to remain mostly unchanged, with sentiment pointing up slightly at 54.17. Finished steel production levels were the most bearish, with an index level of 48.61.

“We finally reached the point where mill output is at equilibrium with demand. The industry will start to slow down the rapid price escalation in the next few weeks and then turn. With the mill outages it will keep pricing high, though the ramp up in costs will be dissipating and begin to drop slowly toward the middle of Q4,” said a distributor.
Source: Platts