MEPS NORTH AMERICAN AVERAGE STEEL PRICE DROPS 6.7 PERCENT IN JUNE

HOT ROLLED COIL

US mill order books are soft and delivery lead times have fallen to four weeks. Demand is slowly reducing, which is to be expected at this time of the year. Transaction prices have dipped in response to lower import offers and an anticipated increase in arrivals from offshore as the US dollar strengthens. The movement in exchange rates also means that domestic producers are losing some export opportunities. Canadian customers are only purchasing what they need for immediate use. Distributors are keeping inventories low and delivery lead times are shortening. Transaction numbers reached a peak in May and are now showing a downward trend.

HOT ROLLED PLATE

US transaction figures have failed to hold at the May levels, despite little change in demand and a scarcity of imports. Sales to wind turbines, infrastructure and defence projects are firm but service centres report that few sectors for commodity plate are exhibiting any real strength. The Canadian market is described as satisfactory with particularly good performance in the wind tower and bridge building industries. Customers have conceded a small increase. However, demand from the construction sector is lacking, with distributors finding it difficult to make sales. A price slide over the summer cannot be ruled out.

COLD ROLLED COIL

Tepid demand from distributors and some consumers, together with weakening scrap costs, has put negative pressure on cold rolled coil transaction values in the US, despite some pick up in auto manufacturing. Service centres continue to keep stocks to a minimum. The Canadian mills have some holes in their June/July production schedules, leading to short delivery lead times. Thus, transaction numbers have fallen from the levels of a month ago, although, the steelmakers are indicating that they fully expect them to rebound in August. Buyers are starting to receive more import offers but they are not attractively priced.

COATED COILS

Auto demand for coated steel is still very strong in the US. Car sales improved again in May as the sector rebounded from a poor 2009. A state incentive scheme to persuade customers to purchase new, energy saving domestic appliances appears to be having a positive impact. Nevertheless, both hot dipped galvanised and electro-zinc coated coil transaction figures have slipped in recent weeks. The Canadian auto sector continues to perform quite well, although demand is expected to ease as the summer approaches. The mills have conceded a discount on recent sales of hot dipped material. However, there is little import competition with offers inline with, or higher than, domestic ones.

WIRE ROD

The escalating price trend in the US has reversed over the last few weeks. The number of import offers has grown, relieving the tightness in supply from domestic sources. In Canada, current spot numbers are $C20 per tonne below the May level. Business conditions are lacklustre.

MEDIUM SECTIONS AND BEAMS

We have noted some price cutting in recent weeks in the US, where producers have very poor order books and are also having to cope with increased import penetration. Consumption in the non-residential construction sector remains at a dismal level. Canadian mill order intake is steady at best. End-user activity is slow and unlikely to improve in the short term. Customers are keeping inventories to a minimum.

REINFORCING BAR

In the US, service centres are loath to hold much stock. Sales are weak. As scrap prices drop away, rebar transaction figures have begun to decline. The reductions anticipated by Canadian customers in May have already started to take hold. Demand is dull with no significant changes envisaged in the near-term.

MERCHANT BAR

In the US, Nucor surprised customers by reducing transaction values by considerably more than the small $US5 per ton decline in the scrap surcharge. Service centres are particularly angry about the stock losses they will incur. Activity remains muted. Canadian demand is feeble. Transaction numbers trended upwards in May but there has been no movement since then. Improvement is unlikely in the near future. Although some imports are available, prices are not attractive.

Source:

• MEPS - NORTH AMERICAN CARBON STEEL PRICES

• MEPS- International Steel Review

• MEPS - ALL CARBON STEEL PRODUCTS COMPOSITE PRICE & INDEX

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