Sheet steel prices continue to drop
Steel-market prices reflect lack of demand at OEM, service center levels
By Tom Stundza -- Purchasing, 3/18/2009 1:56:00 PM
Sheet steel prices have continued to slide this month, based on mid-month surveys of buyers and other market sources who suggest the steel-using manufacturing sector has shut down. Partial marketplace surveys show that hot-rolled steel sheet in coil, the benchmark grade, is selling at mid-month for an average $473/ton, down from $499 in February, and the lowest potential monthly average since July 2005.
Buyers, suppliers and analysts all see further slippage as the month progresses. “Demand and pricing continue to look fairly bleak at this point,” reports analyst Mike Gambardella at J.P. Morgan Securities. He notes that executives at suppliers Nucor and Steel Dynamics “painted a relatively similar dour outlook.” In fact, Nucor CEO Dan DiMicco this week talked with Wall Street analysts about “continued deterioration in economic and market conditions” so that customer demand has continued to weaken, causing steel orders and prices to fall further.
“Every single sector of the flat-rolled market is in distress,” suggests John Packard during a conference call with Bank of America-Merrill Lynch investors. Packard is a veteran steel agent/broker and now publishes the Steel Market Update newsletter. “I’ve never seen anything like it in my 31 years in the business.”
New market news supports the view that prices have yet to find a floor. A full report will be available to subscribers of Purchasing’s Steel Flash Report, which will be available at Purchasingdata.com on March 31.
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