http://agmetalminer.com/2009/10/26/steel-producers-admit-market-is-weakening-and-prices-likely-to-slide/ Sourcing & Trading Intelligence for Global Metals Markets Wed, 08 Feb 2012 15:39:20 +0100 hourly 1 http://wordpress.org/?v=3.3.1 http://agmetalminer.com/2009/10/26/steel-producers-admit-market-is-weakening-and-prices-likely-to-slide/comment-page-1/#comment-18856 R J Cover Mon, 26 Oct 2009 17:27:52 +0000 http://agmetalminer.com/?p=1759#comment-18856 One month ago, forecasting the direction of steel prices in North America seemed daunting. C4C had depleted stocks of both steel and vehicles. As automakers increased production schedules to replenish dealer vehicle inventories, steelmakers found themselves with renewed fortification of their order books. Most users found themselves scrambling for steel in the spot markets, awaiting lead times for new steel. Resolve for increasing steel prices evolved, but it was temporary. Now, the direction has become clearer. Prices are not likely to increase in early-to-mid 2010. The current SAAR is below 10 million vehicles and the 2010 forecasts of 11.5 million vehicle sales and higher are both unlikely to occur and probably won’t be drivers in increasing steel prices anyway. That level of car sales, actually thought to be anemic in prior cycles, is not high enough to drive steel mills to the high capacity utilization rates that drive price increases. And when capacity utilization rates are low, service center inventories do not deplete either, leaving the market with no drivers to push prices upward. One month ago, forecasting the direction of steel prices in North America seemed daunting. C4C had depleted stocks of both steel and vehicles. As automakers increased production schedules to replenish dealer vehicle inventories, steelmakers found themselves with renewed fortification of their order books. Most users found themselves scrambling for steel in the spot markets, awaiting lead times for new steel. Resolve for increasing steel prices evolved, but it was temporary. Now, the direction has become clearer. Prices are not likely to increase in early-to-mid 2010. The current SAAR is below 10 million vehicles and the 2010 forecasts of 11.5 million vehicle sales and higher are both unlikely to occur and probably won’t be drivers in increasing steel prices anyway. That level of car sales, actually thought to be anemic in prior cycles, is not high enough to drive steel mills to the high capacity utilization rates that drive price increases. And when capacity utilization rates are low, service center inventories do not deplete either, leaving the market with no drivers to push prices upward.

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