Sheet-steel prices are down
Further slippage in sheet-steel prices expected in December
Tom Stundza -- Purchasing, 11/24/2009 3:11:59 PM
See also
Hot-rolled sheet steel prices flat for second month.
Note: More details on the steel market will be available in the monthly Steel Flash Report to be posted Monday, November 30, on www.purchasingdata.com.
Supply has overshot demand, triggered by a 10% increase in
steel-sheet output in October while demand was flat-to-down, so buyer
resistance has short-circuited fourth quarter price increases and pushed market
prices down this month. And now, 62% of the buyers polled by Purchasing.com see
further sheet transaction price slippage in December, a traditionally weak
buying month.
Hot-rolled steel sheet spot prices have fallen to $508/ton this month from $535 in October and from $686 a year ago. Cold-rolled steel sheet prices have fallen this month to an average $607/ton from $630 in October-and are down $175/ton since last November.
New-order delivery leadtimes this month are averaging 4 weeks across the supply chain but have shortened to as low as two weeks, according to some anecdotal reports. There still are no signs of resurgence in end-user purchasing activity of flat-rolled steel, except by the auto parts sector-and that's not certain to grow during the winter months.
Actually, steel purchasing has gone back into hibernation this month: 82% of the buyers polled are buying only just as much or less tonnage than they did in October. While economists suggest manufacturing activity will show positive momentum in coming months, since durable goods orders are improving somewhat, steel nowadays still is only being bought to meet immediate needs on the factory floor. While service centers booked more orders than they shipped in November, end-use buyers continued the sit-on-the-wallet steel-buying strategy that has been in play all year.
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