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'Challenging times upon the horizon' for US sheet market - 4 October 2011

Buyer paralysis continues to plague the US sheet market, sources say, as stockists and distributors delay purchases amid uncertainty regarding the direction of future pricing and the overall economy.

Spot sheet prices, while still in the same ranges as last week for coldrolled and hot-dipped galvanized material, have migrated toward the lower end of those ranges, Steel Business Briefing understands. CRC and HDG have been roughly $760-800/short ton and $800-850/s.t, respectively.

"I'm hearing of the same offers, but also hearing of CRC and HDG prices being offered at the low end of your range," a midwest market source says. "What's happening in the stock and commodity markets is not lost on steel buyers, as they are very concerned with future business. Buyers are being offered some really low prices because nobody wants to buy anything more than they need."

Hotrolled coil prices have hovered around $640-690/s.t, but sources say even "small" deals are now available for $630/s.t or less.

A stockist source says he's been approached by mills with sheet offers, rather than having to seek out deals. "That tells me things are soft," he says. "We usually only hear from (mills) when they want to move some tons."

With the downturn in US financial markets and the recent retreat in Asian prices, "I don't see anything that will prevent a (price) slide" going forward, the source says.

"I wish I could be more optimistic, but I think there could be challenging times upon the horizon," he says.


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