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Buyers, prices 'pause' in uncertain US sheet market - 24 January 2012

Uncertainty surrounding scrap prices, furnace restarts at RG Steel and ArcelorMittal and an overall market malaise have stalled the run-up in US sheet prices.

A mild winter has some forecasting scrap prices could fall by $20/long ton or more for February, while nearly 3.5m additional short tons of flatrolled capacity coming back onstream between RG's Sparrows Point mill and ArcelorMittal's Cleveland-west works has buyers on their heels.

"The market perception right now is causing people to pause," one eastern stockist tells Steel Business Briefing. "My feeling has always been there wasn't enough demand (to fully support recent mill price hikes)."

SBB's spot ranges have remained steady since last week - around $720-750/s.t for hotrolled coils, $810-840/s.t for coldrolled and $840-870/s.t for hot-dip galvanized, all fob mill.

The Steel Index - which like SBB is owned by Platts - has seen a similar stalling, with its HRC price flat week-on-week at $748/s.t, CRC up only $2 to $836/s.t and HDG up $12 to $890/s.t. TSI's HRC price had climbed $46/s.t in the prior four weeks.

"Price gains have slowed, with the coming February scrap purchases set to put pressure on any further increases," a midwest source says, adding that mill restarts "will reassert a fight for market share" that could further depress prices.

Another stockist says while one top-tier mill continues to seek $770/s.t for HRC, he's unaware of anyone paying that price. He agrees lower February scrap prices could generate additional downward pressure. "It's such a psychological market," he says.


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