Houston — While prices for long steel and flat-rolled products continued to decline in the US throughout the third quarter, Nucor CEO John Ferriola said Tuesday he believes pricing in the domestic market has hit bottom.
"Speaking in general terms across all of our products, without getting into specifics, we do feel that in many of our products that pricing has bottomed," Ferriola said during a conference call with industry analysts.
US Midwest rebar prices have fallen roughly 13% from a year-high of $715/st in April to $625/st as of October 14, according to S&P Global Platts pricing data. US spot prices for hot-rolled coil, meanwhile, have tumbled nearly 36% since beginning the year, when they were $740/st. The daily Platts TSI US HRC price took another step lower Tuesday, falling $5.50/st to $476.25/st.
Ferriola said he sees a few trends in the market that could drive steel pricing back up, including an improved outlook for scrap prices. US scrap prices have declined six of the past seven months when compared with the prior month, with only August seeing an uptick.
"We anticipate that scrap pricing will go up about $20/lt next month, maybe $20-$25/lt, somewhere in that neighborhood, and we think that trend will continue throughout the year," Ferriola said. "Our best guess on scrap pricing right now over the year is up $20-$40/lt by the end of the year."
Nucor is also seeing its sales volumes picking up in the fourth quarter, Ferriola said.
"When we start to look at our bookings -- particularly in our sheet area -- over the last several weeks, our bookings have improved," he said, adding that this has been particularly true for HRC demand, while demand for cold-rolled coil and galvanized sheet has been less challenged throughout the year.
Overall, sheet market participants agreed Tuesday that prices were approaching or had already hit a bottom. Larger-tonnage restock buys were heard to have occurred over the past two weeks at discounted prices, helping to fill mill order books and helping to begin pulling up the low end of available prices.
-- Justine Coyne, justine.coyne@spglobal.com
-- Edited by Bill Montgomery, newsdesk@spglobal.com