Although US flat-rolled steel price erosion is creeping to a halt, a definitive turnaround point has yet to be established, sources said Tuesday. A service center executive pegged the bulk of the hot-rolled coil market within Platts' specifications of $450-$460/st, down slightly from last week's range.
Buyers and mills alike are sensing the bottom is near, he said, but no one wants to be the first to commit to a large order or institute a price increase.
"When we believe we're at the bottom, we'll go in and get some extra tons," he said. "But we haven't seen it yet. We need the mills to draw a line in the sand. So we're just buying what we have to buy and nothing more." A source with a top-tier mill agreed that mills are hesitant to raise prices until the overall market environment improves.
"I think lead times have to expand a bit and scrap needs to find a floor," he said, adding that scrap may well have bottomed out this week.
A trade case filing in the next 60 days would really help a lot. Our lead times have improved somewhat, but we need stronger, more consistent bookings and we all need margin expansion," the source said.
A source with a second top-tier mill said both inquiries and orders from spot customers are up, and "those holding out are simply trying to play a pricing game."
At least one buy-side source said he believes mills could spur the market into action with an increase.
"I actually think the mills are missing the boat right now and that they could get things moving quickly with a well thought-out increase (of $24.50ish/cwt) and stick to it," he said.
Platts lowered its hot-rolled assessment to $450-$460/st from $455-$465/st and maintained its cold-rolled coil assessment at $590-$600/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
Source: Platts
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