What a difference a month makes! Reduction in imports, upward price management at the producer level; as well as improvement in the manufacturing sector, have all been contributors to the “bullish” view of the flat rolled steel market. There are chinks in the armor when it comes to the market fundamentals, as most industry experts caution. However, the majority feel the fundamentals still support the continued upward trajectory of pricing.
Several points to consider in support of the continued rising trajectory:
- Worldwide positive trend in purchasing managers indexes
- Depressed inventory levels
- Reduced import volumes
- Reduction in China’s steel output
- Graphite electrode shortages
Although the above issues appear to be taking place, the scrap prices and iron numbers do not appear to be maintaining the same fundamentals. Additionally, as our dollar gains strength it could apply pressure to commodity prices.