The US flat products market was described as “steady but slow” in July. The lack of orders kept delivery lead times very short. In an attempt to halt the downward price spiral, leading mills announced hikes of $US40 per short ton on all strip mill products.
Customers were reluctant to commit to the new numbers before they had time to assess the situation. Planned maintenance breaks in the second half of 2012 should help the supply/demand balance.
The Canadian mills are also trying to secure advances of a similar amount to those in the US. They are hoping this will be sufficient to stop the sharp decline seen in June. Capacity cutbacks should provide a good opportunity for the initiative to take hold. With the recent reductions in local prices, importers are not finding the market particularly attractive and volumes of foreign material are running below the levels of 2011 and early 2012.
Chinese market values continued to slide in July. Demand from end-users remains poor, despite the government’s decision to cut interest rates in the hope of kick-starting the slowing growth of the economy. The export market has also been softening both in terms of price and demand, creating further pressure at home.