Steel Buyers Getting Nervous

Steel Market Update continuously is in conversation with flat rolled steel buyers from around the country. We have noticed a growing nervousness within the steel community as the buyers grapple with ever higher steel prices and extended lead times. In some cases the lead times on foreign material are not much more than what the domestic mills are quoting and, as one large service center put it to us earlier today, “We are starting to take a serious look at foreign, which is not what we [normally] do.”

The General Manager for a second very large service center told us today, “I think the HR Futures market is quite informative at the moment, and I believe that prices could very well follow the trend in the forward curve. While I recognize the unusual issues specific to the US market are real, there is such a disparity between the US and everywhere else, that I fear of a collapse in the summer, assuming anything close to normal production occurs. This market sure fits into Correnti’s comments that the market can easily absorb/use the added volume. Unless and until we see another full year where we don’t see the kind of immense production problems that we’ve seen the last 2 years from our current mill suppliers, they don’t have a leg to stand on saying there are too many imports or to many domestic mills…