US sheet prices remain high, but spot market tenuous

Pittsburgh (Platts)--14Aug2014/551 pm EDT/2151 GMT


US sheet producers are enjoying relatively high, stable pricing compared with the rest of the world, but their position is far from guaranteed, market sources said Thursday.

"I think we're in the beginning of a good expansion of metal use, but I don't buy into the argument that prices need to go up," said one trader.

"Prices have been high for non-supply and demand reasons for a long time. If these guys aren't careful, they're going to kill that goose."

The trader added that trade case chatter and slowly disappearing pent-up demand in the automotive industry have underpinned the market lately and, while those things are unlikely to vanish in the near-term, another upward push on domestic prices could drive a significant number of buyers offshore.

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"We're already at high levels. Demand is good, but you can kill this market if you're not careful," he said.

A Midwestern service center executive said he and his customers are limiting their buying in expectation of a 10% dip in price sometime in the fourth quarter.

That dip will likely come from a surge in import buying, he said, as at least one of his import suppliers believes the much-vaunted trade cases against cold-rolled and hot-dipped galvanized will not materialize.

"The importers don't think the mills will follow through with the lawsuit, the dumping lawsuit, because that would prevent them from raising prices and would impact the automotive customers who are getting the IF [interstitial-free steel] and other grades from overseas," he said. "They have backed off a little bit because of the threat of the dumping suits, but they're essentially going to call their bluff and bring in steel at a higher pace."

Platts maintained its hot-rolled pricing Thursday at $680-685/st and its cold-rolled pricing at $800-810/st. All prices are normalized to a Midwest (Indiana) ex-works basis.

--Dan Hilliard, daniel.hilliard@platts.com
--Edited by Jaime Concha, jaime.concha@platts.com

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