May 03, 2023
Sources confirm quiet markets across US

Steel distributors, service centre operators, and mills alongside OCTG and pipeline insiders share a common perspective on the market: “all is quiet”, they tell Kallanish.

“Business conditions are all over the place but mostly very slow. With mills still pushing prices up, it causes uncertainty. Major projects are sometimes delayed until the market becomes clearer,” shares a plate distributor.

A mill source says: “It’s quiet for sure! I think buyers are just waiting patiently to see what prices do before they place their next orders; probably also want to see how the May scrap market develops. They cannot wait that long, though, as inventories are not so high that they can afford to sit this out for a long time.”

A service-centre operator who primarily sells hot and cold rolled sheet expresses similar pains about uncertainty. “In my opinion, the bottom line is confusion – confusion about supply cost increases, cost of money, and corporate taxes. Small business owners are not investing in inventory, equipment, or expansion, and this is not good,” he explains.

Oil and gas drilling sources are as concerned by the quiet market as flat steel sources.

A Texas-based distributor explains: “Gas prices are still way too low. Tenaris is servicing most of the rigs, so, distributors have fewer rigs to service. Government policy concerns make operators shy, and risk-averse.”

The operator of a mid-western service-centre opines: “Higher prices are excellent.  The challenge is for producers to defend their conversion margin. That’s no easy task in market consuming less than pre-Covid.”

Meanwhile, a US market analyst for an international banking enterprise located in Europe says: “My impression is there is a perception that we are somewhat near the price peak and buyers turned much more cautious, but inventories are still at reasonably low levels. Hence, there is no outright panic despite the elevated price levels.”

Across the country, a perfect confluence of factors is making the market uneasy. All eyes are on scrap prices, imported products, mill production levels, and US policies relating to energy.

Kristen DiLandro USA

Source: Eurometal