Major steelmakers in the US have announced a series of transaction price hikes over recent weeks for strip mill products. These are steadily being implemented. There is little import competition to prevent further increases being applied.
Certainly, distributors are keen for the proposed rises to take hold as they will produce benefits in terms of stock valuation. Nevertheless, market players are concerned that the price recovery might not be sustainable if the mills prematurely restart idled facilities. Service centre business is still down by 40/50 percent with only a small recent increase in activity, most probably due to the price advances.
The economy remains depressed, leading to a persistently low level of steel consumption. Canadian transaction values have bottomed, prompting us to record a number of rises this month. The domestic mills believe that destocking may be complete. They report that their order position has shown a strong improvement in recent weeks as customers try to fulfil their requirements in advance of the summer holidays. The threat of escalating prices also seems to be spurring on order placement.
Source: MEPS International Ltd
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