Steel Products Prices North America
May 24, 2016
Steel Buyers Worry Mills May “Reach Too Far”
Written by John Packard
Whenever SMU speaks to steel buyers about flat rolled steel pricing cycles we inevitably hear about how the domestic steel mills have a tendency to over-correct to both the low and the high sides of the cycle (boom/bust). In the process there seems to be an assurance that market volatility will continue to be significant as the markets try to return to the mean. Every cycle has its driving force: too much (or too little) supply, extended (or short) lead times, too much (or not enough) service center inventories, too much (or too little) foreign steel imports, etc.
We are in a supply constrained price cycle. The reduction of foreign steel imports, removal of the excess service center steel inventory, and the idling of some domestic steelmaking capacity has resulted in much longer lead times and a name-your-price environment at the mill level.
