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Capacity cuts fail to shore up US sheet steel prices

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Despite some capacity cuts from electric arc furnace steelmakers, the US flat-rolled market remained soft Tuesday.

Both Nucor’s Hickman, Arkansas, facility and Steel Dynamic’s Butler, Indiana, facility have taken one of their two casters offline, multiple market sources said. At least one source also said production cuts are being considered at Nucor’s Crawfordsville, Indiana, facility. Neither Steel Dynamics nor Nucor was immediately available for comment.

A mill source said he has been “fairly successful” in obtaining hot-rolled orders at $580-$590/st, in line with Platts’ current assessment, but recent production cuts likely will not be able to overcome raw material weakness in the near-term.

“In fact, January may be the high point of the year,” he said, referring to raw material prices.

A buyer in the Houston area said he was able to purchase an unspecified amount of hot-rolled at $540/st. He added that import pressure and the strong dollar were contributing to local price erosion.

“Given what all is coming in, why would anyone come into the market to buy?” he said.

A top-tier mill source said he is still seeing hot-rolled prices around the $600/st mark, though volumes remain low.

“We’re seeing a lot of mills talking to customers about $600/st hot-rolled–but the buying is still very thin,” he said. “To me, the bigger issue that needs to play out is melt being taken off by several people right now.”

A Midwest service center source said the EAF production cuts need to be bolstered by a 10% cut from integrated mills before they really impact the market. The same source recently made two buys of cold-rolled with a combined tonnage of 450-500 st at $730/st.

“I just hope that somewhere down the line they cut capacity,” he said. “If they don’t, this will get to be a blood bath.”

Its hot-rolled assessment Tuesday at $580-$590/st and its cold-rolled assessment at $720-$730/st. All prices are normalized to a Midwest (Indiana) ex-works basis.


Zhejiang Yaang Pipe Industry Co., Limited

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Metals · Steel

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