NORTH-AMERICAN MARKET EASES AS PRODUCTION COSTS ESCALATE

HOT ROLLED COIL

US transaction values continued to rise in the third quarter 2009 as delivery lead times extended. Although raw steel output was climbing steadily as blast furnaces were relit, the economy remained depressed, leading to a persistently low level of steel consumption. Selling figures leveled off in the final trimester. A flurry of mill price hike announcements in December translated into substantially higher transaction numbers for period one 2010 business. The primary driver for the advances was escalating input costs. This upward trend continued until May, when prices started to decline as the market slowed for seasonal reasons. The steelmakers, desperate for orders, began to make a series of concessions. Customers secured a further discount of around $US40 per tonne this month. The situation in Canada mirrored that in the US. Throughout the review period, distributors kept stocks to a minimum. There was also a scarcity of attractive import opportunities.

HOT ROLLED PLATE

North American transaction figures climbed throughout most of the first half of 2010 but the upward movement was mainly cost driven. Sales of commodity grade material remained weak, particularly to the construction sector. Demand for the higher specifications improved due to recovery in several end-user sectors. Values started to slide in June as delivery lead times contracted. Further declines are expected in the next few months as import offers become more competitive.

COLD ROLLED COIL

North American prices moved up throughout much of the twelve month assessment span amidst depleted inventories and a relatively low level of demand with the exception of auto related applications. The primary drivers of the positive price development were hardening scrap costs, tight supply and a lack of interesting import offers. Producers started to cut values in June as the traditional summer slowdown resulted in inadequate mill order books.

COATED COILS

The price tendency in North America was upwards for the majority of the last twelve months. The auto sector became much more active and white goods sales were stimulated by a state run rebate programme in the US. However, the construction industry failed to rebound to any great extent. The mills agreed discounts in June/July and another concession was given for August business as order books failed to fill.

MEDIUM SECTIONS AND BEAMS

The North American market endured dismal consumption caused by an ailing nonresidential construction sector. Transaction values this month are only just above those of a year ago, despite a number of fluctuations due to scrap movements. We have noted some price cutting recently. Producers have poor order books and are now trying to cope with increased import penetration.

REINFORCING BAR

Seasonally contracting sales volumes adversely affected North American transaction values during the fourth trimester 2009. Despite the ongoing poor state of the building industry and a reluctance by distributors to hold stock, the producers tabled a series of monthly advances through to June this year on the back of positive scrap movements. Mill activity remains soft with short delivery lead times. A price decline has set in.

MERCHANT BARS

Very dull market conditions resulted in US steelmakers marking down transaction values in autumn 2009. Although sales remained muted at both the mills and distributors, buyers agreed a number of price hikes during the first quarter 2010 as scrap costs surged. This tendency was reversed in May. We cannot see any prospect for improvement this year as weakness persists in all consuming sectors. The situation in Canada was comparable.
 

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