March Steel Distributor Survey Results (pdf)

Overall end market activity in March continues to be lackluster, averaging 0.8% growth over the same quarter last year compared to 1% in February and .4% in January. On a sequential basis, demand activity was unchanged with 68% percent of respondents reporting flat growth over February. Non-residential construction, energy and fabrication continue be strong end markets for steel but are being offset by weakness in automotive, residential construction and manufacturing markets. Furthermore, less than impressive flat product order activity continues to have an offsetting effect on long product activity growth which is ramping due to the seasonal pick up in commercial and industrial construction. The average mill spot selling price for hot rolled sheet increased for the first time in over 8 months to $542 per ton (+ $22) and ranged between $535 and $550 per ton throughout the month. Announced sheet price increases for April of $25 - $30 per ton are being fully absorbed, as reported by over 90% of our contacts. For May, mini-mill producers NUE and STLD are trying to pass sheet increases through of $50 to $60 per ton which is not being supported by their integrated counterparts which reportedly have increased May pricing $25 - $30. Despite Nucor positioning itself to be the price leader in flat products, consensus is that realized average price increases are likely to be limited to the $25 -$30 per ton offered by MT and X. Distributors voiced concerns this month over the effects that increasing prices may have on a sluggish demand environment, suggesting that purchases are likely to be delayed or cancelled as a result.