US HRC Steel market shows bearish trend in October

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Activity in the US hot rolled coil market is poor. Demand from the energy sector continues to decline. Delivery lead times are down to three weeks, or less. Service centre inventory levels are medium to low as distributors see no urgency to purchase, when prices are steadily dropping, said MEPS International.
Commodity plate lead times are down to two/three weeks, or even shorter in some instances. Producers are offering hefty discounts to try to conclude orders. Import volumes continue to expand and demand is lacklustre. End-user markets such as oil and gas, mining and yellow goods show no signs of recovery.
Cold rolled coil customers have negotiated a discount of approximately 4 percent. Buyers find it hard to predict the bottom, especially as the market heads for its traditional November/December slowdown. Mill order books are very weak. Service centres report acceptable sales levels but note that the economy is soft.
Despite strong consumption and recently announced trade cases, coated steel selling figures have weakened, in line with other strip mill products. Auto production is stable at a high level. Construction, which has been relatively good, is now heading towards its seasonal downturn.
High service centre inventories of structural sections are difficult to deplete. Sales have still to pick up. Recent positive signals from the non-residential building sector have reversed.
Lower scrap costs, together with the availability of cheap Turkish offers, have led to weaker rebar prices in the US. Selling figures are likely to decline further, quite soon. However, consumption is holding up.
Merchant bar demand remains quite modest as the agricultural and mining sectors are weak. Despite recent discounting by local steelmakers, the spread between domestic and import prices is still sizeable. Further downward developments cannot be ruled out.