Posted on 17 Aug 2018
US sheet buyers are keeping inventories lean in anticipation of prices falling further, Kallanish hears from market sources.
"We are sitting at two months," says one Midwest service centre source. "Most others are also bringing down inventories."
A second Midwest buyer says just-in-time buying has been a fact of life since the 232 tariffs were implemented. Concurrently, mills have settled down on the pricing front as they work to retain extant business - with the exception of at least one $30/short ton increase on cold-rolled and coated products.
"I think it would be foolish for price increases at this time," he says, describing the $30/st floated increase. That increase appears to be mill specific, he says. "We got quoted a price this morning from another mill that does not indicate an increase."
A source at one top-tier sheet mill says the inventory drawdown is hardly surprising, considering normal seasonal factors.
"I cannot imagine anyone is increasing inventories right now," he says. "With demand slightly lower in the second half than in the first half, and us booking orders for the fourth quarter, it seems improbable that anyone is building inventory ahead of OEM outages at Thanksgiving and Christmas/New Years."
Kallanish currently puts hot-rolled at $900-920/st with cold-rolled at $1,000-1,020/st. All prices are ex-works, domestic mill.
