Market players not directly impacted by this summer's labor negotiations could have the most to gain in the event of a work stoppage, market observers said Thursday.
Several buy-side sources have said some electric arc furnace producers are aggressively buying scrap to prepare for a work stoppage at their integrated competitors' mills.
A source with a top-tier EAF producer said it would be standard for integrated producers to stockpile slabs ahead of a potential work stoppage, but said no such measures were being taken by his mill. He added that it's not a given that work stoppages will happen.
A West Coast service center source said he could see EAF producers gaining the upper hand in pricing should integrated producers experience a work stoppage.
Their upside may be limited, however, by global overcapacity. This is especially true on the import-dependent West Coast, he said.
"It would strengthen their ability to raise prices, but there's still plenty of steel out there," he said.
Even if their volumes are reduced by a work stoppage, integrated mills could ultimately benefit from contentious labor negotiations by trimming fixed costs, a second service center source said.
"I've watched them for two years with the white collar [employees]," he said. "I guarantee you they have a strategy with the blue to reduce costs."
Platts maintained its hot-rolled assessment Thursday at $460-$465/st and its cold-rolled assessment at $570-$590/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
Source: Platts
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.