UNITED STATES March 19 2014 6:19 PM
NEW YORK (Scrap Register): US HR coil steel spot prices nose-dived in February, falling just under –5% over the course of four weeks as offers turned increasingly aggressive in order to secure orders.
After experiencing small declines in January, Midwest spot prices entered February on shaky ground with January SIMA import numbers the highest for some time (see below) and participants questioning the markets’ ability to absorb extra supply. As February progressed, the latest transactions reflected the continuous downward pressure, firstly at around the US$660/short ton level and then a further US$10/s. ton lower in the space of a week. EAF steel producers were said to be the most aggressive, but buyers also noted regional price differentials were emerging. Price levels quickly reached US$640/s. ton by month-end, with nobody any wiser as to where the bottom may be.
Flat steel imports in January have been revised upwards, currently reported to have been over 1 million tonnes, a significant +29% increase m-om. If these are to be the final values, they represent the highest monthly imports since Q4 2006. February SIMA data came it at just over 900kt, with volumes from India jumping +133% m-o-m to 113kt. Imports from Germany and France also increased m-o-m, whilst Canadian and Japanese origin material both fell -50% from January levels.
Steel service centre inventories totalled 8.5 million short tons in January, -2.1% y-o-y. Shipments were broadly unchanged from January 2013 levels, close to 3.6 million short tons.
Capacity utilisation at US steel plants held steady at 76.4% in February, whilst preliminary weekly crude steel output figures showed a slight uptick in production to 1.66 million tonnes (+0.1% m-o-m).
The manufacturing sector overall performed strongly, as ISM’s latest PMI reported 53.2 for February (+1.9 m-o-m). Several key indicators reported growth whilst most participants responded positively to current demand expectations.
Construction spending in the US rose +0.1% m-o-m to US$943 billion, a +9.3% jump from January 2013 levels. A rise in private construction spending (+0.5%) offset month-on-month falls from the public sector (-0.8%)