February US steel market sentiment less bullish: Platts survey

Pittsburgh — Bullish sentiment remains for the US steel market in February, although positive convictions have come off slightly from January, according to the monthly survey of the market by S&P Global Platts. Most participants are expecting higher finished steel prices in coming weeks, as well as slightly higher raw material prices and production, but unchanged inventory levels on average.

In the survey of US producers, distributors, traders and end-customers, conducted in the run-up to February, the index for steel price development fell from 90 in January to 71 in February, indicating fewer strong expectations of an increase (an index of 50 indicates stability).

2021 started out strong, with continued increases through the supply chain, but respondents expressed concern about when the market may turn down. "The market has peaked on scrap...we will see a steel peak in the next 45-60 days," said a trader.

"Most recent buying activity has been in effort to protect our backlog. New project awards are well off the pace of existing/ongoing project shipments," said an end user.

The mill sector was the most bullish about February prices, with an 83.3 price development index level. End users followed with 77.8, with distributors at 71.4, and traders the least bullish at 57.1.

Participants still expected steel production to see some increases as well, with the index averaging all groups at 65.3. Mills again were the most bullish at 83.3, with most other respondents in the low 60s.

The raw materials index saw the greatest decline. Still slightly bullish, but falling to 60.5 down from 91 in January brought down by traders posting a bearish 44.

Respondents put the expected finished steel production change index at 65.3 on average, while most believed inventories will remain unchanged once again at an average index level of 50.