Final Thoughts

Imported steel prices are no longer competitive with domestic steel mill pricing – even on light gauge galvanized and other specialty products that normally have gone to trading companies. Lead times are short, but as one steel executive put it to me this afternoon, “It’s not that the mills have no business. [For this time of year] normal lead times at reasonable booking rates.” There is a rumor of a very large line pipe order in the works (not booked yet). The capacity utilization rates are above 80 percent (although at the lowest levels of the year this past week). On our HARDI steel conference call today, all of the wholesalers reported strong demand for galvanized by their mechanical contractors. These are all good things and should be supportive of steel pricing. That has not been the case.

Scrap prices surprised everyone with a strong $30 per gross ton drop for the month of June. The non-construction markets are reporting reductions in demand. As we moved around the industry today, we heard demand referenced as being stable to down as much as 7 percent year-over-year.