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US trade cases providing a long fuse to sheet steel prices
DateTime: 2015-8-7 10:29:41    

The ongoing US trade cases against coated and cold-rolled steel products -- and the anticipated filing next week of a hot-rolled trade case -- may yet perk up US flat-rolled pricing, though conditions are steadily deteriorating, market sources said Thursday.

One buy-side source said $460/st was still a valid hot-rolled number for small customers, though larger customers have broken through to $450/st as a result of mills' soft order books.

Barring any production outages as a result of US Steel and ArcelorMittal's labor negotiations with the United Steelworkers, pricing will continue to soften as buyers keep their orders modest, he said.

But the combined effects of three trade cases and possible production outages or even capacity shutdowns is bound to catch up to the market sooner or later, said one service center executive.

"All this stuff is adding up, but the buyer is yawning because it's not affecting the market," he said. "But it will, and they're going to get caught. It's almost like the fuse has been lit, but it's a long fuse."

He added that the cumulative effects of the cases might take until sometime next year to really push pricing up, but estimated that the eventual price push could be north of $100/st in total.

A second service center executive said he believes total pricing increases will be more modest -- about $40/st -- but that they'll hit before the end of the year.

"I think what you're going to see is the trade cases and some capacity coming down," he said. "I think they have to get it up another $40/st. They've got to make some money."

Platts held its hot-rolled assessment Thursday at $460-$470/st and its cold-rolled assessment at $580-$590/st. All prices are normalized to a Midwest (Indiana) ex-works basis.

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