Steels' great LEAP forward. LEAP=Liquidating Excess inventories As fast as Possible.

Inventory swings are one of the major factors contributing to the inherent high volatility of steel prices.  For sure, they are an important part of our round-trip pricing forecast for hot-rolled band on the world export market in the next six months.

A “technical” price rally for hot-rolled band on the world market?

WSD places 60:40 odds that there will be a 15-25% rally of hot-rolled band (HRB) prices on the world export market in the next few months.  In fact, there are signs the rally is on the verge of happening including: a) steel scrap prices are up about $20 per gross ton reflecting strong orders by steel mills in Turkey and the Far East; b) the Tier IV mills – the Ukrainians – are now garnering a 12% higher price – about $360 per tonne, FOB the port – when exporting; c) steel traders and some steel mills report a rise in new order entry activity; d) integrated steel mills in a number of countries continue to cut back production; e) billet prices have rallied substantially on the world market (at about $370 per tonne, FOB the port of export, it is priced $40+ per tonne above slab); and f) the Tier I mills’ export price no longer seems to be eroding – i.e., it’s holding at about $380 per tonne, FOB the port of export. 

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