Steel Demand, Prices Continue to Decline

Construction and auto industries contribute to falling demand.

Steel demand remained weak and prices low in November as the automotive, home appliance and construction industries continue to struggle, according to an IHS Global Insight report released Nov. 30.

On the positive side, capacity utilization rates for steelmakers have improved significantly over the year-earlier period. Through Nov. 13 the capacity utilization rate was 70%, up from 51% last year, wrote IHS pricing and purchasing analyst Tom Stundza in the "November Buyers' Perspective of the Steel Market."

Several North American steelmakers are trying to stem declining prices and recover rising scrap costs by increasing spot market prices for carbon steel sheet products in December and January.

IHS reports the mills say "improving steel demand," which hasn't shown up in statistical reports yet, is prompting the attempted pricing revisions. The increases would bring January hot-rolled to $580 a ton, cold-rolled and galvanized to $680 a ton and electrogalvanized to $740 a ton.

Benchmark prices for hot-roll sheet in coil have dropped to an average $539 per ton in November from $556 in October, IHS reports. Some buyers are reluctant to accept the December average of $565 being touted by some mills.

The seasonal slowdown in scrap supply pushed shredded scrap to an average $350 a ton from $341 in October. Some market analysts say they wouldn't be surprised if scrap prices increase again in December, according to IHS.

TAGS: The Economy
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