SMU Ranges & Indices: Mixed Messages with Some Slippage

Steel buyers reported a mixed bag this week with some mills quoting extremely long lead times (hot rolled at 6-8 weeks) while others were still willing to discuss pricing in early February if a reasonable order was connected to the competitive quotation. One service center executive told us about mill lead times, “USS is in 2nd week Feb for HR [plant not identified], which is unusually short for them. There have been many unreported short outages/lost mill production segments, due to the weather. These have served to actually extend lead times longer than they otherwise would be. One mill said the weather disruptions have masked the weak order book for the moment, as orders are reassigned and re-promised out.”

We heard from a mill source that “the market seems to be fragmented.” They went on to point to US Steel as having a good order book and still being limited on melt which they felt would be resolved with the return of the Fairfield blast furnace. They pointed to the issues at AK Steel which has effectively taken them out of the spot market and the strong contract order book at AM (ArcelorMittal) which is keeping them out of the spot market. Essar Steel Algoma has some limitations on production and ThyssenKrupp seems to have filled their order book with aggressive contracts and 1st Quarter spot business. On the flip side they point to a couple of the mini-mills have become aggressive recently although the words used were “slightly aggressive” as opposed to dropping their drawers for an order.