Final Thoughts

As I bounce around the market this week talking to steel buyers, I am trying to get a better feel for potential changes, how contract negotiations are going, how receptive end-user customers are toward the higher prices being offered (compared to one year ago), and what kind of foreign steel offers are out there. The following is some of what I learned.

I heard from several service center buyers that their steel mill suppliers are beginning to offer more spot tons (or increased contract tonnage), which is in line with what we are seeing regarding service center inventories. Our early look at service center inventories, which we shared with data providers, showed inventories as being very close to what I would consider “balanced” at more than 2.5 months of supply. This would create a situation where steel buyers have a reduced need to buy, thus reducing lead times and opening opportunities out of the domestic steel mills. (Note: the full-service center inventories and shipment report will be available to Premium level subscribers as well as our data providers later this week.) When added to the chip shortage affecting automotive production, it stands to reason that more material should be available to go either into the spot market or to expand contract tonnage.