Possible Peak for Sheet Steel Prices

by on
Ferrous Metals

In an earlier  series on steel pricing trends, we predicted that steel prices would ease this winter. In recent months, the market has seen a dwindling demand for sheet steel, surprisingly lower than expected, and prices should follow a steady path downwards. Purchasing.com recently announced that the global “steel-price surge” has likely hit a peak.

Although Purchasing.com shares that most “mill executives believe the fundamentals remain in place for transaction sheet steel prices to remain at high levels and for the third-quarter price increase to be absorbed by the market,” domestic demand hasn’t fared well this year, dropping 4% mid-year.

“Domestic shipments actually began slipping in May and midyear imports of 15.92 million tons are on pace for a 4.2% slide this year-after a 26.6% collapse in 2007,” writer Tom Stundza explained earlier this week. Hot-rolled sheet imports in coils jumped a few percentage points to 1.48 million tons, but this  serves as an obvious contrast to  cold-rolled sheet imports and hot-dipped galvanized sheet imports, which  dropped more than 24%.

The third quarter is rarely the most profitable for the steel industry, with European shut-downs and a “summer vacation” in Japan, but market data suggests this year could see a larger drop than most. CIBC Capital Markets analyst Mike Willemse told Purchasing.com that the market “may see a declining price environment due to reduced end-market demand, greater raw material availability and higher inventories throughout the supply chain.”

–Amy Edwards

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.