WASHINGTON, Dec 03 (Reuters): US buyers are taking a break from the current dizzying surge in steel prices, but as they tuck into their Thanksgiving meals, many will be wondering what awaits them on their return to the negotiating table.
Following a rapid recovery over the past three months, the price of hot rolled coil had reached US $700 per short tonne by mid-November - up more than 50 per cent from its August low point.
Several US producers are now said to be quoting $840/850 per short tonne for new orders. So, what is behind these eye-watering price rises?
The imbalance between supply and demand is without doubt the main driver of US steel prices, at present. With restricted availability, the scales have firmly tipped in the mills' favour.
Steelmakers undertook substantial production cuts amid the Covid-19 pandemic, and both distributors and end-users allowed their inventories to be run down. As demand has started to recover, many steel buyers are needing to restock, but they are finding that the mills simply do not have the material available to sell, as demonstrated by ever extending delivery lead times.
© 2024 - All Rights with The Financial Express
