Steel Mills Solidify Grip on Steel Pricing

“Mills are stubborn this week. We’ll see what happens when US gets caught back up,” is how one steel executive pegged the market for Steel Market Update earlier today. Many of the steel service centers we spoke to over the past few days are indicating there is strengthening demand in portions of their business. What we have been trying to determine is if the strength in the steel mill order books is related to customers needing to book orders to accommodate the longer lead times or, are the service centers, in particular, reacting to the US Steel situation and protecting and expanding their inventory positions?

The primary focus over the past couple of weeks has been on supply. We are seeing production issues at US Steel Gary Works (ice affecting ore receipts), US Steel Great Lakes (repairs on roof over BOP and collector main services the two vessels), Essar Steel Algoma (ice affecting ore receipts) as well as AK Steel (Ashland furnace backlog). There have also been other minor issues which have affected production and have helped tighten up supply east of the Rocky Mountains.