Final Thoughts

A couple weeks back we were beginning to think the rise in spot prices would soon slow and we were close to a tipping point. We no longer have that opinion due to Snowmageddon, the winter storm that exacerbated the already late deliveries out of multiple steel mills. On top of that, we are seeing mills scheduling maintenance on equipment or downtime on furnaces during the months of April, May and June. This will shrink supply even further at a time when we thought prices could be vulnerable to a slide.

“Now we believe we’re heading north of $1,300 before topping out. The market has actually tightened further in the last week or so,” is what we heard from the general manager of one service center. “The USS-announced BF outage, and now AM/NS Calvert outages in May, are examples of why it’s difficult to get the capacity utilization rate much higher in this environment. With HR Futures now over $1,000 through November, capitulation seems to have emerged and high prices may be here for a long time….”