The heat is on across the Midwest following a wonderful Memorial Day weekend. But with that warm weather comes a cool down in steel sheet prices. The price climb that we saw earlier this year has since stalled and reversed course slightly as some mills in the Great Lakes region return to normal production levels. This comes as we’re heading into the seasonally slower summer months.
Market sources say that despite lead time and healthy demand, it wasn’t enough to justify further price increases, especially with more supply available. Many companies were hit by production or supply chain disruptions earlier this year, but have since resumed normal production.
According to an article by Michael Cowden with American Metal Market, an increasing spread between prices in the rest of the world is also keeping a lid on domestic hot-rolled tags. One Midwest service center was quoted saying, “Mills are entitled to be profitable, but it’s not real and it won’t last if it gets too far out of whack. And North America has been finessing a higher price than other industrialized parts of the world, which has some people concerned.”
Another thought is that the “out-of-whack” prices might be cold-rolled from China. Cold-rolled imports from China have surged as prices continued to nose-dive. Market sources said that there was concern Chinese cold-rolled prices were getting unusually close to hot-rolled offerings from Russia.
Still, not everyone is feeling that this cool down in domestic steel prices will happen because we’re expected to have an increase in demand from the non-residential construction sector.
It will be interesting to watch and see whose predictions play out over then next several months.